What will abc bank net interest income be at the end

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Reference no: EM132803112

Assets (in Million $)

Cash $40

One-year mortgages (currently 10% annually): $100 (duration: 1 year)

5-year fixed-rate loans (7% annually): $360 (duration: 6.2 years)

Liabilities and Equity (in Million $)

1-year term deposits (currently 6% annually): $160 (duration: 1 year)

3-year term fixed-rate deposits (7% annually): $300 (duration: 2.7 years)

Equity: $40

Required:

Problem a. What will ABC Bank's net interest income be at the end of the first year?

Reference no: EM132803112

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