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In times of interest rate changes, mismatching between maturities of assets and liabilities can create investment and refinancing risk depending on the movement of the
In times of interest rate changes, mismatching between maturities of assets and liabilities can create investment and refinancing risk depending on the movement of the interest rate. If a bank receives 10 % fixed deposit of $ 100 and invest it in a 12% fixed loan of 100 million of 2 years, what is the impact on the Net Interest Income (NII) if market interest rate increases or decreases by 1%.
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