# Question

Consider the following balance sheet positions for a financial institution:

• Rate-sensitive assets = $ 200 million; Rate-sensitive liabilities = $ 100 million.

• Rate-sensitive assets = $ 100 million; Rate-sensitive liabilities = $ 150 million.

• Rate-sensitive assets = $ 150 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 1 percent decrease in interest rates.

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

• Rate-sensitive assets = $ 200 million; Rate-sensitive liabilities = $ 100 million.

• Rate-sensitive assets = $ 100 million; Rate-sensitive liabilities = $ 150 million.

• Rate-sensitive assets = $ 150 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 1 percent decrease in interest rates.

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

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