Impact on the bank net interest income

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If a bank invested $ 40 million in a two-year asset paying 10 percent interest per year and simultaneously issued a $ 40 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 1.5 percentage points?

Reference no: EM132719921

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