What is the change in profits if interest rates rise by 6%? a) £0m b) -£7.2m c) -£1.2m d) £7.2m

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
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4. Suppose Bank Alpha has the following end-year 2016 balance sheet:
Liabilities
Assets
Rate sensitive assets
£ 50m
Fixed rate assets
£100m
Total
£150m
Rate sensitive liabilities
£70m
c) -£1.2m
d) £7.2m
Fixed rate liabilities
£80m
Total
£150m
What is the change in profits if interest rates rise by 6%?
a) £0m
b) -£7.2m
Transcribed Image Text:4. Suppose Bank Alpha has the following end-year 2016 balance sheet: Liabilities Assets Rate sensitive assets £ 50m Fixed rate assets £100m Total £150m Rate sensitive liabilities £70m c) -£1.2m d) £7.2m Fixed rate liabilities £80m Total £150m What is the change in profits if interest rates rise by 6%? a) £0m b) -£7.2m
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