Million RM 20 1 of 2 aaging Interest Rate Risk) Financial institutions, banks in particular, specialize in earning a higher rate of return on their assets relative to the interest paid on their liabilities. Below is a would be example of a Balance sheet from CIMB bank. Use the income GAP analysis to answer the questions Assets include assets with maturity less than one year, variable-rate mortgages, short- term commercial loans, portion of fixed-rate mortgages (say 10%) Liabilities include money market deposits, variable-rate CDs, short-term CDs, federal funds, short-term borrowings, portion of checkable deposits (20%) and a portion of savings (10%) CIMB Bank Balance Sheet Assets Million RM Liabilities Reserves and Cash Items 5 Checkable deposits Money Market Securities Deposit accounts 5 Less than 1 year Savings Deposits 20 1 to 2 years CDS Greater than 2 years Variable rate Less than 1 year Residential mortgages 1 to 2 years 5 Greater than 2 Variable rate years Fixed rate (30 year) 20 Fed Funds Commercial Loans Borrowings Less than 1 year 15 Less than 1 year 15 1 to 2 years 10 1 to 2 years 10 Greater than 2 Greater than 2 years 25 Physical capital Bank Capital Total 140 Total 140 Questions Answer the question are in the Google form. Submit your answers there 25 5 10 10 15 20 20 5 years 5 10 5 4 points 6. Calculate the change in CIMB's profits if interest rates decreases from 8% to 6%? (Write the final figure and mention if the profits in increase or decline) * Your