1. Consider the following Balance Sheet for Total Caribbean Bank(TCB) (in millions) ASSETS LIABILITIES Floating rate mortgages...
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Question:
1. Consider the following Balance Sheet for Total Caribbean Bank(TCB) (in millions)
ASSETS | LIABILITIES | |||
Floating rate mortgages | 120 | Demand deposits | 110 | |
(currently 12% annually) | (currently 3% annually) | |||
30 years fixed rate loans | 1 year CD | 50 | ||
(currently 7% annually) | 80 | (currently 6% annually) | ||
Equity | 40 | |||
200 | 200 |
a. What is TCB expected net interest income (NII) at year end? (1mark)
b. What is TCB expected net interest income at year end if interest rates grew by 500 basis points. (1 mark)
c. What is TCB expected net interest income at year end if interest rates fell by 200 basis points on assets, but decline by 4% on liabilities. (2 marks)
Related Book For
Financial Markets and Institutions
ISBN: 978-0077861667
6th edition
Authors: Anthony Saunders, Marcia Cornett
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