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Question 5 (10 marks/Asset-Liability Analysis) (m) $100 $30 Balance Sheet Assets (m) Liabilities/Equity 5-year US Treasury Bonds $40 Demand Deposits 1-year floating rate corporate bonds

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Question 5 (10 marks/Asset-Liability Analysis) (m) $100 $30 Balance Sheet Assets (m) Liabilities/Equity 5-year US Treasury Bonds $40 Demand Deposits 1-year floating rate corporate bonds $57 5-year CDs (repricing every 9 months) 9 month fixed rate corporate bonds $12 3-year CDs 6-month US Treasury Notes $82 3-month CDs Total Assets $191 Total Liabilities $40 S21 $191 Given the balance sheet above, calculate the change in net interest income for a one-year horizon if the interest rate on one-year RSL increases byl% and the interest rate on one-year RSA increases by 3%. -End of Paper

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