Explain gap analysis for the bank

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Suppose that you are a manager of a bank that has $25 million of fixed-rate assets, $40 million of rate-sensitive assets, $35 million of fixed-rate liabilities, and $30 million of rate-sensitive liabilities. Conduct a gap analysis for the bank and show what will happen to bank profits if interest rate falls by 6 percentage points. What actions can you take to reduce the bank's interest rate risk in the future?

Reference no: EM132908455

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