The following information is from First Yaupon Savings Association.
-If all interest rates decrease by 15 basis points,what is the expected impact on the FI's net interest income? (Hint: Use the repricing model to answer this question. )
A)+$150,000.
B)-$150,000.
C)-$750,000.
D)+$750,000.

Question

The following information is from First Yaupon Savings Association. 
-If all interest rates decrease by 15 basis points,what is the expected impact on the FI's net interest income? (Hint: Use the repricing model to answer this question. )
A)+$150,000. 
B)-$150,000. 
C)-$750,000. 
D)+$750,000.

Quizplus · Accepted Answer

Effect of a decrease in rates of 15 basis points (-0.0015)
∆NII = (GAP) x ∆R
∆NII = -$500,000,000 x (-0.0015) = +$750,000.

The Following Information Is from First Yaupon Savings Association