Calculate the dollar interest-sensitive gap

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Reference no: EM132731270

Question - A bank has provided the following balance sheet information.

Assets Liabilities

Cash $1,500,000 CDs maturing before 12 months $8,000,000

Loans maturing in 9 months 4,000,000 Checking accounts 4,000,000

Money market securities 3,000,000 Money market deposits 6,000,000

Securities maturing in 6 months 5,000,000 Federal funds purchased 500,000

Fixed Assets 1,000,000 Equity Capital 1,000,000

Required -

(a) Calculate the dollar interest-sensitive gap.

(b) If interest rise by 0.75 (three quarter of a percent), calculate the dollar effect (clearly stating increase or decrease) on the bank's net interest income.

Reference no: EM132731270

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