(Answered)-8.1. Suppose that a bank has $5 billion of one-year loans and $20 billion of five-year loans....

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8.1.  Suppose that a bank has $5 billion of one-year loans and $20 billion of five-year loans. These are financed by $15 billion of one-year deposits and $10 billion of five-year deposits. Explain the impact on the bank’s net interest income of interest rates increasing by 1% every year for the next three years.

 

Solution ID:10137778 | Question answered on 16-Oct-2016

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