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Calculate maturity gap and changes in net interest income if the expected change in interest rates on instruments with repricing or maturity of up to 2 years is +2% and those up to 5 years is +1.5% (additional information inside the table)

Calculate maturity gap and changes in net interest income if the expected change in interest rates on instruments with repricing or maturity of up to 2 years is +2% and those up to 5 years is +1.5% (additional information inside the table)

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 30CE: Cornerstone Exercise Debt Issued at a Premium (Straight Line) Refer to the information for Ironman...
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Calculate maturity gap and changes in net interest income if the expected change in interest rates on instruments with repricing or maturity of up to 2 years is +2% and those up to 5 years is +1.5%
(additional information inside the table) 

Assets Liabilities and Equity Cash 20 Overnight REPOS $ 140 1-month T-bills 150 9-month fixed-rate CDs 200 300 1-year fixed-rate CDs 250 5-year floating-rate CDs with annual repricing 200 Subordinated debt 7-year fixed rate 8-year T-notes 250 15-year fixed-rate corporate bonds 20-year floating-rate mortgages with repricing 150 50 every two years 30-year floating-rate mortgages with repricing every six months 80 Equity 210 Total assets $1 000 Total liabilities and equity $1 000
Transcribed Image Text:Assets Liabilities and Equity Cash 20 Overnight REPOS $ 140 1-month T-bills 150 9-month fixed-rate CDs 200 300 1-year fixed-rate CDs 250 5-year floating-rate CDs with annual repricing 200 Subordinated debt 7-year fixed rate 8-year T-notes 250 15-year fixed-rate corporate bonds 20-year floating-rate mortgages with repricing 150 50 every two years 30-year floating-rate mortgages with repricing every six months 80 Equity 210 Total assets $1 000 Total liabilities and equity $1 000
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