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Consider the following balance sheet for WatchoverU Savings Incorporated ($ in millions): Assets Liabilities Floating-rate mortgages (currently 11% annually) $ 51 NOW accounts (currently 7%
Consider the following balance sheet for WatchoverU Savings Incorporated ($ in millions):
| Assets | Liabilities | ||
|---|---|---|---|
| Floating-rate mortgages (currently 11% annually) | $ 51 | NOW accounts (currently 7% annually) | $ 71 |
| 30-year fixed-rate loans (currently 8% annually) | 51 | Time deposits (currently 7% annually) | 21 |
| Equity | 10 | ||
| Total | $ 102 | $ 102 |
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?
a. Net interest income ________ million
b. Net interest income ________ million
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