Suppose that Pettis Bank has $300 million in assets which are rate sensitive. Pettis also has $400 million in rate-sensitive liabilities. Pettis seeks to analyze its exposure to interest rate risk by conducting a gap analysis. Given this information, you have calculated that Pettis Bank has a gap of -$100 million and a gap ratio of 0.75. If interest rates increase, Pettis net interest margin would be expected to _____.

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Suppose that Pettis Bank has $300 million in assets which are rate sensitive. Pettis also has $400 million in rate-sensitive liabilities. Pettis seeks to analyze its exposure to interest rate risk by conducting a gap analysis. Given this information, you have calculated that Pettis Bank has a gap of $100 million and a gap ratio of 0.75 . If interest rates increase, Pettis' net interest margin would be expected to TOTAL SCORE: 1/2 (to complobe this stmp and unlock the next step)