Question
The bank balance sheet below lists the categories of assets and liabilities, along with the total amount of each category, and the amount in each
The bank balance sheet below lists the categories of assets and liabilities, along with the total amount of each
category, and the amount in each category that is "interest rate sensitive" or repriced within one year.
Calculate the existing Dollar Gap for the bank.Next, calculate the effect (change) on this bank's Net Interest
Income if interest rates fall or decrease by 0.50 percentage points or 50 bp."%" denotes either the current
interest rate earned earned or paid on the designated asset or liability category.RSA and RSL denote interest
rate sensitive assets and liabilities, respectively, that are repriced within one year.Note, youdo nothave to
include either the existing or new level of Net Interest Income, as I'm only asking for thechangein Net
Interest Income.Please show your work in order to receive credit.
Assets
Amount
%
RSA
Liabilities and Equity
Amount
%
RSL
Cash
80
0.0%
Non-interest deposits
100
0.0%
Securities
270
5.5%
108
NOW checking
170
2.0%
Loans, net
600
7.5%
240
MMDA
330
4.0%
330
Fed funds sold
0
CDs
160
5.0%
80
Non-earning assets
50
Fed Funds purchased
150
3.0%
150
$1,000
Equity
90
$1,000
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