What is the rate-sensitive gap of bank

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Reference no: EM133102930

The Tidewater State Bank has $1,000 in total assets (all of which are earning assets), $700 of which will be repriced within the next 90 days. This bank also has $800 in total liabilities, $400 of which will be repriced within the next 90 days. Currently, the bank is earning 8 percent on its assets and is paying 5 percent on its liabilities. Show all your work.

A. If interest rates do not change in the next 90 days, what is this bank's net interest margin?

B. What is the rate-sensitive gap of this bank?

C. If interest rates on both assets and liabilities rise by 2 percent in the next 90 days, what would be the bank's net interest margin?

Reference no: EM133102930

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