Financial Markets and Financial Institutions: Answer the following.

Question 24

Kansas City (K.C.) Bank had interest revenues of $80 million last year and interest expenses of $35 million. About $400 million of its $1 billion in assets are rate sensitive, and $700 million of its liabilities are rate sensitive. Calculate the following:

1) K.C. Bank's net interest margin

2) K.C. Bank's Gap

3) K.C. Bank's Gap Ratio

Present the formula, show your calculations and highlight your answers.