If Interest Rates Increase 75 Basis Points for an FI

question 29

Multiple Choice

If interest rates increase 75 basis points for an FI that has a gap of -$15 million,the expected change in net interest income is

• A)-$112,500.
• B)+$112,500.
• C)+$1,125,0000.
• D)-$1,125,0000.

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Definitions:

Dikes

Underground structures formed when magma forces itself across rock layers and solidifies.

Shield Volcanoes

broad, gently sloping volcanoes built from highly fluid lava flows, often found in Hawaii.

Nonexplosive Outpourings

Nonexplosive outpourings refer to the gentle flow of lava from a volcano, without significant explosions or pyroclastic activity.

Lava

Molten rock expelled by a volcano during an eruption, which solidifies on the Earth's surface.