1 If an FI funds $60 million one-year assets paying 11% interest per annum with $60...

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1 If an FI funds $60 million one-year assets paying 11% interest per annum with $60 million three-year liabilities paying 6% interest per annum. a) What will be the bank's net interest income at years 1 and 2, if at the end of the first year all interest rates have decreased by 0.7 percent (70 basis points)? b) What type of interest rate risk is this: refinancing or reinvestment? 1 If an FI funds $60 million one-year assets paying 11% interest per annum with $60 million three-year liabilities paying 6% interest per annum. a) What will be the bank's net interest income at years 1 and 2, if at the end of the first year all interest rates have decreased by 0.7 percent (70 basis points)? b) What type of interest rate risk is this: refinancing or reinvestment?