Question: 10a. Using the data below, determine the repricing gap for each maturity range. maturity range time deposits expected MMDA runoff expected savings runoff securities loans

10a. Using the data below, determine the repricing gap for each maturity range.

maturity range

time deposits

expected MMDA runoff

expected savings runoff

securities

loans and leases

3 months or less

2500000

550000

750000

5000

2500000

over 3 months to 1 year

2550000

2250000

2250000

100000

7500000

over 1 year to 3 years

450000

0

0

180000

2000000

over 3 years

100000

0

0

550000

3800000

b. If interest rates are expected to increase by 45 basis points over the next year, what effect will it have on the bank in the following year?

c. What actions might the manager of the bank take now to reduce the risk associated with the expected change in rates?

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