The Following Information Is from First Yaupon Savings Association

question 20

Multiple Choice

The following information is from First Yaupon Savings Association.
-If all interest rates decrease by 15 basis points,what is the expected impact on the FI's net interest income? (Hint: Use the repricing model to answer this question. )

• A)+$150,000.
• B)-$150,000.
• C)-$750,000.
• D)+$750,000.

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Definitions:

Bayes' Law

A theorem that describes the probability of an event, based on prior knowledge of conditions that might be related to the event.

Conditional Probabilities

Probabilities of events given the occurrence of some other event.

Likelihood Probabilities

The probabilities that reflect the plausibility of different parameter values given the observed data, used in statistical inference.

Posterior Probabilities

The probabilities assigned to outcomes or hypotheses after taking into account known data and a priori probabilities.