Consider the following simple balance sheet (in \$ million) of First National Bank. Be specific...
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Consider the following simple balance sheet (in \$ million) of First National Bank. Be specific in your answers. Where appropriate, show your workings. Questions a) What is First National Bank's Net Interest Income? b) What is First National Bank's 1-year repricing gap? c) What is the change in interest income if interest rate levels increase by 1.5% ? Assume that all variable rates increase equally. d) What would you advise First National Bank if you would like to minimise interest rate risk? e) What steps would you recommend First National Bank if the management is convinced that interest rates will decrease and you would like to take advantage of this decrease
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Consider the following simple balance sheet (in \$ million) of First National Bank. Be specific in your answers. Where appropriate, show your workings. Questions a) What is First National Bank's Net Interest Income? b) What is First National Bank's 1-year repricing gap? c) What is the change in interest income if interest rate levels increase by 1.5% ? Assume that all variable rates increase equally. d) What would you advise First National Bank if you would like to minimise interest rate risk? e) What steps would you recommend First National Bank if the management is convinced that interest rates will decrease and you would like to take advantage of this decrease 