If interest rates on both assets and liabilities rise by 2 percent in the next 90 days,what would be this bank's net interest margin?
A)4.2 percent
B)5.3 percent
C)5.8 percent
D)6.2 percent
E)7.8 percent

Question

Quizplus · Accepted Answer

The net interest margin would remain unchanged at 5.3 percent because both assets and liabilities are affected equally by the 2 percent rise in interest rates, thus maintaining the same margin between interest income generated by assets and interest paid on liabilities.

If Interest Rates on Both Assets and Liabilities Rise by 2