If interest rates on both assets and liabilities decrease by 2 percent in the next 90 days,what would be this bank's net interest margin?
A)3.4 percent
B)4 percent
C)0.4 percent
D)5.6 percent
E)2 percent

Question

Quizplus · Accepted Answer

The net interest margin would remain unchanged at 3.4 percent because both assets and liabilities are affected equally by the 2 percent decrease in interest rates, leaving the margin between them the same.

If Interest Rates on Both Assets and Liabilities Decrease by 2