
Explanation:
Change in net interest income = Total change in interest rate (Percentage points) × Size of cumulative gap in dollars.
Thus,
Expected change in net interest income = $128 × (−0.015) = −1.92
Ultimate access to all questions.
Q.4229 National Bank has a cumulative gap for the coming year of +$128 million. The interest rates are expected to decrease by one and a half percentage points. Calculate the expected change in the Bank’s net interest income.
A
-1.23
B
-1.92
C
1.89
D
128
No comments yet.