Question: Please answer the following question asap . . 14. A bank invested $50 million in a two-year asset paying 10 percent interest per year and
Please answer the following question asap..
14. A bank invested $50 million in a two-year asset paying 10 percent interest per year and simultaneously issued a $50 million, one-year liability paying 8 percent interest per year. The liability will be rolled over after one year at the current market rate. What will be the impact on the banks net interest income if at the end of the first year all interest rates have increased by 1 percent (100 basis points)?
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