Consider the following balance sheet for MMC Bancorp (in millions of dollars)

a. Calculate the value of MMC’s rate-sensitive assets, rate sensitive liabilities, and repricing gap over the next year.

b. Calculate the expected change in the net interest income for the bank if interest rates rise by 1 percent on both RSAs and RSLs. If interest rates fall by 1 percent on both RSAs and RSLs.

c. Calculate the expected change in the net interest income for the bank if interest rates rise by 1.2 percent on RSAs and by 1 percent on RSLs. If interest rates fall by 1.2 percent on RSAs and by 1 percent on RSLs.

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Liabilities/Equity Assets 1. Equity capital (fixed) $25.00 $ 6.25 1. Cash and due from 2. Short-term consumer loans (one-year maturity) 3. Long-term consumer loans (two-year maturity) 4. Three-month T-bills 5. Six-month T-notes 62.50 2. Demand deposits 50.00 31.25 3. One-month CDs 4. Three-month CDs 5. Three-month bankers' acceptances 6. Six-month commercial paper 7. One-year time deposits 37.50 50.00 37.50 43.75 25.00 6. Three-year T-bonds 7. 10-year, fixed-rate mortgages 25.00 8. 30-year, floating-rate mortgages 9. Premises 75.00 75.00 25.00 8. Two-year time deposits 50.00 50.00 6.25 $337.50 $337.50