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Questions and Problems: (Note: students will be responsible for checking each question to make sure it is free of mistakes with regard to numbers and

Questions and Problems: (Note: students will be responsible for checking each question to make sure it is free of mistakes with regard to numbers and information) Q8) Consider the following balance sheet positions for a financial institution: Rate-sensitive assets = $200 million Rate-sensitive liabilities = $100 million Rate-sensitive assets = $100 million Rate-sensitive liabilities = $150 million Rate-sensitive assets = $150 million Rate-sensitive liabilities = $140 million a. Calculate the repricing gap and the impact on net interest income of a 1 percent increase in interest rates for each position. b. Calculate the impact on net interest income of each of the above situations, assuming a 1 percent decrease in interest rates. c. What conclusion can you draw about the repricing model from these results?

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