Refer to the Following Table If Interest Rates Rise by 500 Basis Points,bank Profits (Measured

question 43

Multiple Choice

Refer to the following table:
$$\begin{array}{l}\text { First Nationwide Bank }\\\begin{array} { | l | l | l | } \hline & { \text { Assets } } & { \text { Liabilities } } \\\hline \text { Interest-sensitive } & \$ 90 \text { million } & \$ 80 \text { million } \\\hline \text { Fixed-rate } & \$ 60 \text { million } & \$ 40 \text { million } \\\hline\end{array}\end{array}$$
If interest rates rise by 500 basis points,bank profits (measured using repricing gap analysis) will:

• A) fall by $0.5 million.
• B) fall by $1.5 million.
• C) increase by $0.5 million.
• D) increase by $1.5 million.

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