What is the impact over the next 30 days on the dealer's net interest income if all interest rates increase by 50 basis points?
A)Net interest income will decrease by $50,000.
B)Net interest income will decrease by $2.125 million.
C)Net interest income will decrease by $475,000.
D)Net interest income will decrease by $2.375 million.
E)Net interest income will increase by $750,000. [Refer to: 8-89]

Question

Quizplus · Accepted Answer

The correct answer is B) Net interest income will decrease by $2.125 million. This is determined by analyzing the impact of a 50 basis point increase in interest rates on the dealer's assets and liabilities, taking into account the interest rate sensitivity and the size of these positions. The net effect is a decrease in net interest income, calculated based on the given information.

What Is the Impact Over the Next 30 Days on the Dealer's