Please provide steps. (Repricing gaps) Consider a financial institution with the following BalanceSheet (amounts are in million; market yields are in parenthesis)AssetsLiability and Equity1-month commercial papersCash1-month T-bills (5.05%)3-month T-bills (5.25%)6-month T-bills (5.50%)2-year T-notes (5.85%)8-year T-notes (6.95%)20-year mortgage (floating rate,rate reset every 6 months)Total Assets$70$440250 7-year debt, fixed rate (6.55%)150 1-year CDs30010015010010050 Equity$870 Total Liability and Equity$y(a) What are x and y?(b) What are the cumulative repricing gaps for 1 month (CGAP1-month), 3months (CGAP3-month), 1-year (CGAP1-year), and 2 years (CGAP2-year)?(c) What is the impact over the next three months on the net interest incomeif interest rate on RSAS and RSLS both increase by 40 basis points (i.e.+0.4%)?(d) What is the impact over the next two years on the net interest incomeif interest rate on RSAS increases by 50 basis points and interest rate onRSLS increases by 30 basis points?

Since you have posted a question with multiple subparts, as per the guidelines, we will be solving…

a) What are x and y? b) What are the cumulative repricing gaps for 1 month (CGAP1-month), 3 months (CGAP3-month), 1-year (CGAP1-year), and 2 years (CGAP2year)? c) What is the impact over the next three months on the net interest income if interest rate on RSAS and RSLS both increase by 40 basis points (i.e. +0.4%)?

a) What are x and y? b) What are the cumulative repricing gaps for 1 month (CGAP1-month), 3 months (CGAP3-month), 1-year (CGAP1-year), and 2 years (CGAP2year)? c) What is the impact over the next three months on the net interest income if interest rate on RSAS and RSLS both increase by 40 basis points (i.e. +0.4%)?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 16P: Ratios Analyses: McCormick Refer to the information for McCormick above. Additional information for...

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