Calculate the impact on net interest income

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Consider the following balance sheet positions for a financial institution.

Rate-sensitive assets = $ 250 million, Rate-sensitive liabilities = $ 125 million.

Rate-sensitive assets = $ 110 million, Rate-sensitive liabilities = $ 125 million.

Rate-sensitive assets = $ 250 million, Rate-sensitive liabilities = $ 140 million.

a. Calculate the repricing gap and the impact on net interest income of a 1 percent increase in interest rates for each position.

b. Calculate the impact on net interest income on each of the above situations assuming a 2 percent decrease in interest rates.

c. What conclusion can you draw about the repricing model from these results?

Reference no: EM132719911

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