Answered step by step
Verified Expert Solution
Question
1 Approved Answer
XY Bank has total assets of $1,200. The total assets include $1,000 of earning assets, all of which will be repriced within the next 30
XY Bank has total assets of $1,200. The total assets include $1,000 of earning assets, all of which will be repriced within the next 30 days. The bank also has $700 in total liabilities, $600 of which will be repriced within the next 30 days. Currently, the bank earns 7 percent on its assets and pays 4 percent on its liabilities.
If interest rates on both assets and liabilities rise by 2 percentage points in the next 30 days, what would be the banks new net interest margin?
Group of answer choices
4.8 percent
4 percent
4.2 percent
5.0 percent
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started