The Following Are the Assets and Liabilities of a Government

question 74

Multiple Choice

The following are the assets and liabilities of a government security dealer. $$\begin{array} { | l | l | } \hline \text { Assets: } & \text { \$150 million } 30 \text { day Treasury bills } \\\hline & \text { \$275 million } 91 \text { day Treasury bills } \\\hline & \text { \$90 million } 180 \text { day municipal notes } \\\hline & \$ 350 \text { million } 2 \text { year Treasury notes } \\\hline & \\\hline \text { Liabilities: } & \text { \$575 million } 14 \text { day repurchase agreements } \\\hline & \$ 290 \text { million } 1 \text { year commercial paper } \\\hline\end{array}$$
-What is the impact over the next 30 days on the dealer's net interest income if all interest rates increase by 50 basis points?

• A)Net interest income will decrease by $50,000.
• B)Net interest income will decrease by $2.125 million.
• C)Net interest income will decrease by $475,000.
• D)Net interest income will decrease by $2.375 million.
• E)Net interest income will increase by $750,000.

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Definitions:

Emotional Trap

A situation where one's emotions control their actions or decision-making, leading to potentially negative outcomes.

Confidence

The feeling or belief that one can rely on someone or something; self-assurance.

Silent Customer

A term for a customer who experiences dissatisfaction with a service or product but does not voice their complaints to the provider.

Silent Customer

A consumer who does not vocally express dissatisfaction with a service or product, often providing little feedback that businesses can act on.