An FI Finances a $250,000 2-Year Fixed-Rate Loan with a $200,000

question 28

Multiple Choice

An FI finances a $250,000 2-year fixed-rate loan with a $200,000 1-year fixed-rate CD.Use the repricing model to determine (a) the FI's repricing (or funding) gap using a 1-year maturity bucket,and (b) the impact of a 100 basis point (0.01) decrease in interest rates on the FI's annual net interest income?

• A)$0;$0.
• B)-$200,000;+$2,000.
• C)-$200,000;-$2,000.
• D)+$50,000;-$500.

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Definitions:

General Fund

The primary operating fund of a governmental entity, used to account for all financial resources except those required to be accounted for in another fund.