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Consider the Following Repricing Buckets and Gaps What Is the Annualised Change in the Bank's Future Net

question 11

Multiple Choice

Consider the following repricing buckets and gaps: $\begin{array}{c}\begin{array}{|l|}\hline \text { Repricing bucket }\\\hline 1 \text { day } \\\hline 1 \text { day to } 3 \text { months } \\\hline 3 \text { to } 6 \text { months } \\\hline 6 \text { to } 12 \text { months } \\\hline 1 \text { to } 5 \text { years } \\\hline \text { Over } 5 \text { years } \\\hline\end{array}\begin{array}{r|}\hline\text { Assets } \\\hline \$ 50000 \\\hline \$ 100000 \\\hline \$ 100000 \\\hline \$ 250000 \\\hline 575000 \\\hline 325000 \\\hline \end{array}\begin{array}{|r|}\hline\text { Liabilities }\\\hline \$ 120000 \\\hline \$ 70000 \\\hline \$ 100000 \\\hline \$ 80000 \\\hline \$ 130000 \\\hline \$ 100000 \\\hline \end{array}\begin{array}{r|}\hline\text { Gaps }\\\hline-\$ 70000 \\\hline \$ 30000 \\\hline \$ 0 \\\hline \$ 170000 \\\hline-\$ 55000 \\\hline-\$ 75000 \\\hline\end{array} \begin{array}{r|}\hline\text { Cumulative gap }\\\hline-\$ 70000 \\\hline-\$ 40000 \\\hline-\$ 40000 \\\hline \$ 130000 \\\hline \$ 75000 \\\hline \$ 0 \\\hline\end{array}\end{array}$

What is the annualised change in the bank's future net interest income if the average rate change for assets and liabilities that can be repriced over five years is an increase of 50 basis points?

Definitions:

Perfect Equality Line

A hypothetical line on a graph representing a situation where everyone has exactly the same income or wealth, demonstrating absolute equality.

Points

In various contexts, points can refer to units of measurement, aspects of discussion, or rewards accumulated from transactions.

Straight Line

The shortest distance between two points, often used to describe a method of linear depreciation in accounting.

Cumulative Share

The total percentage or portion of something that accumulates over time or through successive additions.