Eve sensitivity to interest rate changes

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EVE sensitivity to interest rate changes

Discuss the impact each of the following will have, in general, on EVE sensitivity to a change in interest rates. Consider two cases where rates rise sharply and fall sharply.

(a) Bank owns a high percentage of assets in bonds that are callable anytime after 3-months:

(b) Banks pays below-market rates on time deposits and market interest rates move sharply higher:

Reference no: EM131517286

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