The following information details the current rate sensitivity report for Gotbucks Bank, Inc. ($ million).

-How will a decrease of 25 basis points in all interest rates affect Gotbuck's net interest income over a planning period of 91 days?
A)+$0.1875 million.
B)+$0.1250 million.
C)-$0.1375 million.
D)+$0.0625 million.

Question

The following information details the current rate sensitivity report for Gotbucks Bank, Inc. ($ million).

-How will a decrease of 25 basis points in all interest rates affect Gotbuck's net interest income over a planning period of 91 days?
A)+$0.1875 million. 
B)+$0.1250 million. 
C)-$0.1375 million. 
D)+$0.0625 million.

Quizplus · Accepted Answer

Change in NII over a 91-day planning period if rates decrease rise 25 basis points (-0.0025)
 ∆NII = (91-day GAP) x ∆R
∆NII = -$75,000,000 F1F1F1S1F1F1F10 (-0.0025)= +$187,500 or +$0.1875 million.

The Following Information Details the Current Rate Sensitivity Report for Gotbucks