Interest rate risk is one of the problems faced by most of the commercial banks.

(i)Define and explain the development of interest rate risk management.(4marks)

(ii)Discuss and explain the measurement model or technique that is used to measure the interest rate risk.(6 marks)

(iii)Select a financial statement of any financial institution for the year ended 2018and 2019from Bursa Malaysia (previously known as KLSE, Kuala Lumpur Stock Exchange) or Australian Securities Exchange and answer the following questions:

a. Based on the financial report, identify the background information of the financial institution such as founder, principal activities and financial year ended etc.(3 marks)

b. Identify the items both under the uses and sources of fund of the financial institution.(3 marks)

c. Analyze the interest expense, interest income, net interest income.(15 marks)

d .Explain what contributes to the changes in the net interest income of the financial institution.(9 marks)

(1200 words limit)