The following is the balance sheet of Boston Bank. The average maturity of demand deposits is estimated at 2 years.
-What is the repricing gap if a 3-year maturity gap is used? Ignore runoffs.
A)$21 million.
B)$44 million.
C)-$80 million.
D)-$60 million.

Question

The following is the balance sheet of Boston Bank. The average maturity of demand deposits is estimated at 2 years. 
-What is the repricing gap if a 3-year maturity gap is used? Ignore runoffs.
A)$21 million. 
B)$44 million. 
C)-$80 million. 
D)-$60 million.

Quizplus · Accepted Answer

3-year maturity GAP
 GAP(3yr) = RSA(3yr) - RSL(3yr)
 GAP(3yr) = (3-month T-Bills + 2-year Bonds) - (Demand Deposits)
GAP(3yr)= (60 + 60)- 180 = 120 - 180 = F1F1F1S1F1F1F10$60 million.

The Following Is the Balance Sheet of Boston Bank