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Bank X has $10 billion dollars of thirty year mortgages as assets and $8 billion of FDIC insured deposits with an average maturity of 1
Bank X has $10 billion dollars of thirty year mortgages as assets and $8 billion of FDIC insured deposits with an average maturity of 1 month. If the yield on thirty year mortgages increases by 150 basis points and the increase in deposit rates increase by 50 basis points the net worth of the bank will:
Decrease | ||
First increase and then decrease | ||
Increase | ||
Remain the same |
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