-If All Interest Rates Decrease by 15 Basis Points, What

question 67

Multiple Choice

$$\begin{array} { | l | l | l | l | l | l | } \hline \text { Assets } & \text { Par Amount } & \text { Rate } & \text { Liabilities } & \text { Par Amount } & \text { Rate } \\\hline \text { 2-year commercial loans } & \$ 600 \text { million } & 10 \% & \text { 1-year CDs } & \$ 900 \text { million } & 7 \% \\\hline \text { 1-year Treasury bills } & \$ 400 \text { million } & & \text { Net Worth } & \$ 100 \text { million } & \\\hline\end{array}$$
-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.
• E)No changE.

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