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A bank today makes $100 in 3-year loans with a 12% fixed annual interest rate....

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Finance

A bank today makes $100 in 3-year loans with a 12% fixed annual interest rate. It funds the loans today with $100 in 1-year CDs that currently have an 8% annual interest rate. What is the banks expected net interest income in the second year if interest rates fall by 1% tomorrow and remain at that level for the next two years

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