What is the change in the expected net interest income

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Reference no: EM132062268

Consider the following balance sheet for Watchover Savings, Inc. (in millions): Assets Liabilities and Equity Floating-rate mortgages (currently 12% p.a.) $ 82 Now deposits (currently 8% p.a.) $ 116 30-year fixed-rate loans (currently 9% p.a.) 101 5-year time deposits (currently 8% p.a.) 29 Equity 38 Total $ 183 Total $ 183 a. What is Watchover’s expected net interest income at year-end? (Enter your answer in millions rounded to 2 decimal places. (e.g., 32.16)) Net interest income $ million b. What will be the net interest income at year-end if interest rates rise by 3 percent? (Enter your answer in millions rounded to 2 decimal places. (e.g., 32.16)) Net interest income $ million c. Using the one-year cumulative repricing gap model, what is the change in the expected net interest income for a 3 percent increase in interest rates? (Negative amount should be indicated by a minus sign. Enter your answer in millions rounded to 2 decimal places. (e.g., 32.16)) Net interest income.

Reference no: EM132062268

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