Question
Consider the following balance sheet for WatchoverU Savings Incorporated ($ in millions): Assets: Floating rate mortgages (currently 12% annually) = $63 30-Year Fixed Rate loans
Consider the following balance sheet for WatchoverU Savings Incorporated ($ in millions):
Assets:
Floating rate mortgages (currently 12% annually) = $63
30-Year Fixed Rate loans (currently 9% annually) = 63
TOTAL = $126
Liabilities
NOW accounts (currently 8% annually) = $8
Time Deposits (currently 8% annually) = $2
Equity = $1
TOTAL = $12
a. What is WatchoverUs expected net interest income at year-end? b. What will be the net interest income at year-end if interest rates rise by 1 percent? (For all requirements, do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places. (e.g., 32.16))
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