Discuss what impact each of the following will have, in general, on EVE sensitivity to a change
Question:
a. Bank owns a high percentage of assets in bonds that are callable anytime after three months.
b. Bank pays below market rates on TDs, and market interest rates move sharply higher.
c. A large percentage of the bank’s assets are in 30 year fixed rate mortgages.
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EVE Sensitivity a If rates fall sharply the bonds will be called The bonds are likely callable aroun...View the full answer
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