If Rate-Sensitive Assets Equal $500 Million and Rate-Sensitive Liabilities Equals

question 38

Multiple Choice

If rate-sensitive assets equal $500 million and rate-sensitive liabilities equals $400 million, what is the expected change in net interest income if rates increase by 1%?

• A) Net interest income will increase by $1 million.
• B) Net interest income will fall by $1 million.
• C) Net interest income will increase by $10 million.
• D) Net interest income will fall by $10 million.
• E) Net interest income will be unchanged.