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Peoples’ Savings Bank, a thrift institution, has a cumulative gap for the coming year of +$145...

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Finance

Peoples’ Savings Bank, a thrift institution, has a cumulativegap for the coming year of +$145 million and interest rates areexpected to fall by 3.5 percentage points.

(1) What is the expected change in net interest income that thisthrift institution might experience?

(2) What change will occur in net interest income if interestrates rise by 1.5 percentage points?

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Peoples’ Savings Bank, a thrift institution, has a cumulativegap for the coming year of +$145 million and interest rates areexpected to fall by 3.5 percentage points.(1) What is the expected change in net interest income that thisthrift institution might experience?(2) What change will occur in net interest income if interestrates rise by 1.5 percentage points?

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