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Calculate net interest income-interest income

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Reference no: EM132546474

Given that paper currencies are no longer (or at least currently) based upon the gold standard financial institutions must contend with, and manage, changes in the cash flows and values of their assets and liabilities.

Consider the following scenario when answering questions:

$1,000 million (or $1 billion) in 10-year fixed-rate loans at 7%.

$900 million in savings deposits with a floating interest rate currently at 3%.

$100 million in equity.

Calculate Net Interest Income = Interest Income - Interest Expense?

Calculate Net Interest Income if interest rates rise by 2%?

Calculate Net Interest margin = Net Interest Income / Earning Assets?

Reference no: EM132546474

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