Question: Problem 7 (10%): The following information details the current rate sensitivity report for Global Bank, Inc. ($ million). Maturity Bucket Overnight 1-30 days 31-91 days

Problem 7 (10%): The following information details the current rate sensitivity report for Global Bank, Inc. ($ million).

Maturity Bucket

Overnight

1-30 days

31-91 days

92-181 days

Assets

Fed Funds

$20

Loans

$10

$15

$80

Liabilities

Fed Funds

$50

Euro CDs

$25

$40

a. Calculate the funding gap for Global Bank using (a) a 30-day maturity period and (b) a 91-day maturity period.

b. How will a decrease of 25 basis points in all interest rates affect Global Bank net interest income over a planning period of 91 days?

c. What does Global Bank's 91-day gap positions reveal about the bank management's interest rate forecasts and the bank's interest rate risk exposure?Briefly discuss

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