Chapter Eight - University of Nevada, Reno | University of ...

b. What will net interest income be at year-end if interest rates rise by 2 percent? After the 200 basis point interest rate increase, net interest income declines to: 50(0.12) + 50(0.07) 70(0.08) 20(.07) = $9.5m $7.0m = $2.5m, a decline of $0.4m. c. Using the cumulative repricing gap model, what is the expected net interest income for a 2 ... ................
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