What would be the impact on the bank net interest income

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Reference no: EM132031329

If a bank invested $65 million in a two-year asset paying 11 percent interest per year and simultaneously issued a $65 million one-year liability paying 8 percent interest per year, what would be the impact on the bank’s net interest income if, at the end of the first year, all interest rates increased by 2 percentage point? (Input the amount as a positive value. Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. (e.g., 32.16))

Net interest income will (increase or decrease) by $____ million.

Reference no: EM132031329

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