Loyola Bank Classifies Its Assets and Liabilities and the Period

question 68

Multiple Choice

Loyola Bank classifies its assets and liabilities and the period (maturity buckets) within which they are subject to repricing as on March 31,2015 as follows: $\begin{array} { l c c } \text { (dollars in millions) } & \text { Interest-sensitive } & \text { Interest-sensitive } \\\text { Maturity buckets } & \text { assets } & \text { liabilities } \\\text { One week } & \$ 50 & \$ 45 \\8 \text { to 25 days } & 75 & 70 \\25 \text { to } 40 \text { days } & 60 & 75 \\40 \text { to } 60 \text { days } & 70 & 80 \\60 \text { to } 90 \text { days } & 80 & 70 \\90 \text { to } 180 \text { days } & 180 & 160 \\180 \text { to } 365 \text { days } & 210 & 190\end{array}$
Silvershine bank has $200 million in earning assets and $280 million in liabilities that are subject to an interest rate change each month over the next six months.If market interest rates suddenly rise by 2 full percentage points,what will be approximate change in the net interest income for the bank?

• A)$8.2 million
• B)-$8.5 million
• C)$8.5 million
• D)$9.6 million
• E)-$9.6 million

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Definitions:

Sarcoplasm

Cytoplasm of a muscle fiber, excluding the myofilaments.

Cytoplasm

The jelly-like substance inside a cell that contains organelles, providing a medium for metabolic activities.

Muscle Fiber

A single muscle cell, known for its elongated shape, that contracts to produce movement.

Potential Difference

The difference in electric potential between two points, resulting in the flow of current when a circuit is closed.