REINVESTMENT RISK. FOR THIS AND THE NEXT TWO QUESTIONS. A financial institution can borrow $100 million for 2 years at 3%. It plans to invest this money in a 1-year security with an interest rate of 4.8% per year. Calculate net interest income for the first year. (I know there are 3 question, but they are related to each other, hope you understand, thank you)

Question 11 options:

1)	$1.8 million

2)	$4.8 million

3)	$1.5 million

4)	$3.6 million

5)	None of the above

Question 12 (1 point)

If interest rates stay the same in the second, calculate cumulative net interest income.

Question 12 options:

1)	$1.8 million

2)	$4.8 million

3)	$1.5 million

4)	$3.6 million

5)	None of the above

Question 13 (1 point)

Calculate the breakeven interest rate for the second year. That is, what earning interest rate in the second year will cause cumulative net interest income to equal zero? Hint: Reconstruct the spreadsheet analysis shown in the video.

Question 13 options:

1)

1.2%

2)

4.8%

3)

3.2%

4)

3.0%

5)	None of the above