The balance sheet of ARGH Insurance shows the following fixed and rate-sensitive assets and liabilities.
-Suppose short-term interest rates increase by 1 percent.Calculate the change in net interest income after the interest rate increase.
A)$50,000.
B)$18,900.
C)$40,400.
D)$53,900.

Question

The balance sheet of ARGH Insurance shows the following fixed and rate-sensitive assets and liabilities. 
-Suppose short-term interest rates increase by 1 percent.Calculate the change in net interest income after the interest rate increase.
A)$50,000. 
B)$18,900. 
C)$40,400. 
D)$53,900.

Quizplus · Accepted Answer

The change in net interest income is calculated based on the sensitivity of the bank's assets and liabilities to interest rate changes. The given options suggest that the correct answer is $50,000, which would be the result of the bank's specific interest rate risk exposure and balance sheet composition.

The Balance Sheet of ARGH Insurance Shows the Following Fixed