Balance sheet for savings

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Reference no: EM131445370

Consider the following balance sheet for X Savings (in milllions). Assets Floating rate mortgages $ 40 (Currently 9% annually) 30-year fixed rate loans (Currently 6% annually) 40 Total Assets 80 Liabilities and Equity 1-year time deposits (currently 5% annually) $ 50 3-year time deposits (Currently 7% annually) 20 Equity 10 Total liabilities and equity 80 a. What Is X’s expected net interest income at year end ? b. What will net interest income be if interest rates rise by 1 percent ? c. Using the cumulative repricing gap model, what is the expected net interest income for a 1 percent increase in interest rates ? d. What will net interest income be at year end if interest rates on rate sensitive assets increase by 1% but interest rates on rate sensitive liabilities increase by 0.5% ?

Reference no: EM131445370

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