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From the following information, if interest rates rise by 5 percentage points, then bank profits (measured using gap analysis) will Assets Liabilities Rate-Sensitive $40 m
From the following information, if interest rates rise by 5 percentage points, then bank profits (measured using gap analysis) will
Assets | Liabilities | |
Rate-Sensitive | $40 m | $50 m |
Fixed Rate | $60 m | $40 m |
a) decline by $1.5 million.
b) decline by $0.5 million.
c) decline by $2.5 million.
d) increase by $2.0 million.
Please explain how you got your answer.
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