Bank of the Atlantic Has Liabilities of $4 Million with an Average

question 12

Multiple Choice

Bank of the Atlantic has liabilities of $4 million with an average maturity of two years paying interest rates of 4.0 percent annually.It has assets of $5 million with an average maturity of 5 years earning interest rates of 6.0 percent annually.What is the bank's net interest income in dollars in year 3, if it refinances all of its liabilities at a rate of 8.0 percent?

• A)-$20,000.
• B)-$10,000.
• C)-$15,000.
• D)+$20,000.
• E)+$10,000.

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Definitions:

Government Policies

The plans and actions taken by a government to influence or regulate societal issues.

Legal-Political Conditions

The state of laws and government policies which can affect the operating environment for businesses and organizations.

Bureaucratic Decisions

Decisions made within an organizational structure characterized by fixed hierarchical levels and a focus on following rigid procedures.

Legal-Political Conditions

The legal and governmental framework within which individuals, organizations, and businesses operate, including laws, regulations, and political climate.