Maturities 1 day +1 day-3mos +3 mos-6 mos +6 mos-12 mos +1 year-5 years Bank 3 Assets (millions) 6 11 10 15 90 Liabilities (millions) 9 17 43 52 11 Use the Repricing Model. If interest rates rise by 56 basis points for assets and 142 basis points for liabilities over the next year, then how will impact the interest income of Bank 3 over the next year? O Bank 3 will experience a loss of $1,483,000 O Bank 3 will experience a gain of $679,400 Bank 3 will experience a loss of $679,400 Bank 3 will experience a gain of $1,953,400
Maturities 1 day +1 day-3mos +3 mos-6 mos +6 mos-12 mos +1 year-5 years Bank 3 Assets (millions) 6 11 10 15 90 Liabilities (millions) 9 17 43 52 11 Use the Repricing Model. If interest rates rise by 56 basis points for assets and 142 basis points for liabilities over the next year, then how will impact the interest income of Bank 3 over the next year? O Bank 3 will experience a loss of $1,483,000 O Bank 3 will experience a gain of $679,400 Bank 3 will experience a loss of $679,400 Bank 3 will experience a gain of $1,953,400
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Bank 3
Assets (millions)
6
11
Liabilities (millions)
Maturities
1 day
+1 day-3mos
+3 mos- 6 mos
+6 mos-12 mos
+1 year-5 years
17
10
15
90
43
52
11
Use the Repricing Model. If interest rates rise by 56 basis points for
assets and 142 basis points for liabilities over the next year, then
how will impact the interest income of Bank 3 over the next year?
Bank 3 will experience a loss of $1,483,000
O Bank 3 will experience a gain of $679,400
Bank 3 will experience a loss of $679,400
Bank 3 will experience a gain of $1,953,400
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