Problem 7 (10%): The following information details the current rate sensitivity report for Global Bank, Inc. ($ million).

Maturity Bucket

Overnight

1-30 days

31-91 days

92-181 days

Assets

Fed Funds

$20

Loans

$0

$10

$15

$80

Liabilities

Fed Funds

$50

Euro CDs

$5

$25

$40

$0

a. Calculate the funding gap for Global Bank using (a) a 30-day maturity period and (b) a 91-day maturity period.

b. How will a decrease of 25 basis points in all interest rates affect Global Bank net interest income over a planning period of 91 days?

c. What does Global Bank's 91-day gap positions reveal about the bank management's interest rate forecasts and the bank's interest rate risk exposure?Briefly discuss