commercial banking assignment.docx - Lin Li Commerical...

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Lin Li Commerical banking 5. 2.5%*(1+10%)=net interest income/575*(1+20%) net interest income=0.0275*690=18.975 8. Coming week Next 30 Days Next 31-90days More than 90 days Total IS liability: 556 430 296 165 GAP -335 -104 219 430 Cumulative GAP -335 -439 -220 210 Explanation: first national bank could benefit if the interest rates fall because they have negative GAP for the coming week and next 30 days. After next 30 days, this bank has a positive GAP, so they can benefit if the interest rate rises. Negative cumulative GAP. The third period is positive GAP, and it would benefit when the interest rates go up. The final period is positive GAP, so
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