AMRO Financials is quite certain that interest rates are going to decrease next month. How should the bank manager adjust the bank’s one-month repricing gap to increase the net interest income when interest rates decrease The bank should set its repricing gap to a positive position. In this case, as rates decrease, interest income will decrease by less than the decrease in interest expense. The bank should set its repricing gap to a negative position. In this case, as rates decrease, interest expense will decrease by more than the decrease in interest income. The bank should set its repricing gap to a positive position. In this case, as rates decrease, market value of assets will increase by more than the increase in market value of liabilities. The bank should set its repricing gap to a negative position. In this case, as rates decrease, market value of assets will increase by more than the increase in market value of liabilities.
AMRO Financials is quite certain that interest rates are going to decrease next month. How should the bank manager adjust the bank’s one-month repricing gap to increase the net interest income when interest rates decrease
The bank should set its repricing gap to a positive position. In this case, as rates decrease, interest income will decrease by less than the decrease in interest expense.
The bank should set its repricing gap to a negative position. In this case, as rates decrease, interest expense will decrease by more than the decrease in interest income.
The bank should set its repricing gap to a positive position. In this case, as rates decrease, market value of assets will increase by more than the increase in market value of liabilities.
The bank should set its repricing gap to a negative position. In this case, as rates decrease, market value of assets will increase by more than the increase in market value of liabilities.
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