If the First National Bank decides to convert $5 million of its fixed-rate mortgages into variable-rate mortgages,

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If the First National Bank decides to convert $5 million of its fixed-rate mortgages into variable-rate mortgages, what happens to its interest-rate risk? Explain with income gap and duration gap analyses.

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Financial Markets And Institutions

ISBN: 978-0132136839

7th Edition

Authors: Frederic S. Mishkin, Stanley G. Eakins

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Question Posted: Nov 12, 2012 01:15 AM

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If the First National Bank decides to convert $5 million of its fixed-rate mortgages into variable-rate mortgages,

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Ratesensitive assets increase by 4 million so GAP goes from 175 million to 135 million Of the ...View the full answer

Financial Markets And Institutions

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