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increase, increase, increase increase, decrease, increase increase, increase, decrease decrease, decrease, decrease decrease, increase, increase Q u e s ti o n 9 0 / 1 point If rate-sensitive assets equal $600 million and rate-sensitive liabilities equals $800 million, what is the expected change in net interest income if rates fall by 1%? Net interest income will increase by $2 million. Net interest income will fall by $2 million. Net interest income will increase by $20 million. Net interest income will fall by $20 million. Net interest income will be unchanged. Q ue sti o n 10 0 / 1 point Earnings sensitivity analysis differs from static GAP analysis by: looking at a wide range of interest rate environments. using perfect interest rate forecasts. calculating a change in net interest income given a change in interest rates. Earnings sensitivity analysis differs from static GAP analysis in all of the above ways. Earnings sensitivity analysis and static GAP analysis do not differ. They are different names for the exact same analysis. Qu est ion 11 0 / 1 point To decrease liability sensitivity, a bank can: buy longer-term securities. attract more non-core deposits. increase the number of floating rate loans. pay premiums on longer-term deposits.
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All of the above. Q u es ti o n 1 2 0 / 1 point If rate-sensitive assets equal $500 million and rate-sensitive liabilities equals $400 million, what is the expected change in net interest income if rates increase by 1%? Net interest income will increase by $1 million.Net interest income will fall by $1 million.Net interest income will increase by $10 million.Net interest income will fall by $10 million.Net interest income will be unchanged. Q ue sti o n 13 0 / 1 point An asset would normally be classified as rate-sensitive if: it matures during the examined time period. it represents a partial principal payment. the outstanding principal on a loan can be re-priced when the base rate changes. All of the above. a. and c. only Qu est ion 14 0 / 1 point When is interest rate risk for a bank greatest? When interest rates are volatile. When interest rates are stable. When inflation is high. When inflation is low. When loan defaults are high. Q u e s ti o 0 / 1 point
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n 1 5 Earnings-at-risk: considers only interest rate “shocks.” is only an effective measure for 90 day intervals or less. examines the change in asset composition, given a change in bank liabilities. examines the variation in net interest income associated with various changes in interest rates. None of the above. What type of GAP analysis directly measures a bank’s net interest sensitivity through the last day of the analysis period? Earnings Net Income Maturity Periodic Cumulative Q u e s t i o n 2 0 / 1 point If rate-sensitive assets equal $500 million and rate-sensitive liabilities equals $400 million, what is the expected change in net interest income if rates fall by 1%?
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