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