Question: Farmville Financial reports a net interest margin of 2 75 percent
Farmville Financial reports a net interest margin of 2.75 percent in its most recent financial report, with total interest revenue of $95 million and total interest costs of $82 million. What volume of earning assets must the bank hold? Suppose the bank’s interest revenues rise by 5 percent and its interest costs and earnings assets increase by 9 percent. What will happen to Farmville’s net interest margin?
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