Use the following bank information for questions .
$\begin{array}{|l|l|l|l|l|l|l|l|}
\hline &\begin{array}{c}
\text { Market } \
\text { Value }
\end{array} &\text { Rate } & \begin{array}{c}
\text { Duration } \
\text { (Years) }
\end{array} & \begin{array}{c}\text { Liabilities }\
\text { and } \
\text { Equity }
\end{array} & \begin{array}{c}
\text { Market } \
\text { Value }
\end{array} & \text { Rate } & \begin{array}{c}
\text { Duration } \
\text { (Years) }
\end{array} \
\hline\text { Cash } & \$ 150 & && \text {Time Deposits } & \$ 500 & 4 \% & 1.25 \
\hline \text { Loans } & \$ 675 & 10 \% & 2.50 &\text { CDs } & \$ 400 & 6 \% & 3.00 \
\hline\text { T-Bonds }&\$175&5\%&5.00&\text { Equity }&\$100&&\
\hline\text { Total }&\$1,000&&&&\$1,000\
\hline
\end{array}$
-What is the bank's expected economic net interest income?
A) $14.75
B) $32.25
C) $44.00
D) $76.25
E) $120.25

Question

Use the following bank information for questions .
 $\begin{array}{|l|l|l|l|l|l|l|l|}
\hline &\begin{array}{c}
\text { Market } \
\text { Value }
\end{array} &\text { Rate } & \begin{array}{c}
\text { Duration } \
\text { (Years) }
\end{array} & \begin{array}{c}\text { Liabilities }\
\text { and } \
\text { Equity }
\end{array} & \begin{array}{c}
\text { Market } \
\text { Value }
\end{array} & \text { Rate } & \begin{array}{c}
\text { Duration } \
\text { (Years) }
\end{array} \
\hline\text { Cash } & \$  150 & && \text {Time Deposits } & \$  500 & 4 \% & 1.25 \
\hline \text { Loans } & \$  675 & 10 \% & 2.50 &\text { CDs } & \$  400 & 6 \% & 3.00 \
\hline\text { T-Bonds }&\$175&5\%&5.00&\text { Equity }&\$100&&\
\hline\text { Total }&\$1,000&&&&\$1,000\
\hline
\end{array}$
-What is the bank's expected economic net interest income?
A) $14.75
B) $32.25
C) $44.00
D) $76.25
E) $120.25

Quizplus · Accepted Answer

The bank's expected economic net interest income is calculated by subtracting the interest expenses from the interest income. Interest income is generated from loans and T-Bonds, while interest expenses come from Time Deposits and CDs.Interest income from loans: $675 \times 0.10 = \$67.5$Interest income from T-Bonds: $175 \times 0.05 = \$8.75$Total interest income: $67.5 + 8.75 = \$76.25$Interest expense for Time Deposits: $500 \times 0.04 = \$20$Interest expense for CDs: $400 \times 0.06 = \$24$Total interest expense: $20 + 24 = \$44$Expected economic net interest income: $76.25 - 44 = \$32.25$

Use the Following Bank Information for Questions -What Is the Bank's Expected Economic Net Interest Income? A)

Use the Following Bank Information for Questions -What Is the Bank's Expected Economic Net Interest Income?
A)