Question
If a bank invested $63 million in a two-year asset paying 15 percent interest per year and simultaneously issued a $63 million one-year liability paying
If a bank invested $63 million in a two-year asset paying 15 percent interest per year and simultaneously issued a $63 million one-year liability paying 12 percent interest per year, what would be the impact on the banks net interest income if, at the end of the first year, all interest rates increased by 2 percentage point? (Input the amount as a positive value. Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. (e.g., 32.16)) Having a difficult time with this question if you could lay this out in an organized manner on how to answer it that would be much appreciated! |
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