-What Is the Repricing Gap for the FI?
A)$0

question 97

Multiple Choice

$$\begin{array} { | l | c | c | l | c | c | } \hline \text { Assets } & \text { Amount } & \text { Rate } & \text { Liabilities } & \text { Amount } & \text { Rate } \\\hline \begin{array} { l } \text { Rate } \\\text { Sensitive }\end{array} & \$ 35,000,000 & 10 \% & \begin{array} { l } \text { Rate } \\\text { Sensitive }\end{array} & \$ 40,000,000 & 8 \% \\\hline \text { Fixed Rate } & \$ 21,000,000 & 9 \% & \text { Fixed Rate } & \$ 12,000,000 & 7 \% \\\hline \text { Non-earning } & \$ 4,000,000 & & \text { Equity } & \$ 8,000,000 & \\\hline\end{array}$$
-What is the repricing gap for the FI?

• A)$0.
• B)$5,000,000.
• C)$9,800,000.
• D)-$5,000,000.
• E)-$8,000,000.

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Definitions:

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.

Book Value

The net value of a company's assets minus its liabilities, often used to assess a company's financial health.

Capital

Financial assets or the financial value of assets, such as cash, used by a company to fuel its business operations.

CAPM

The Capital Asset Pricing Model, a model that describes the relationship between systematic risk and expected return for assets, particularly stocks.