If the spread effect is zero and all interest rates decline 50 basis points, the bank's NII will change by ________________ over the year.

Question

Quizplus · Accepted Answer

Based on the given information, if the spread effect is zero, then the change in NII will be solely due to the change in interest rates. A 50 basis point decline in all interest rates would lead to a decrease in NII. Using the information provided, the calculation would be: $140,000,000 x -0.0050 = -$700,000. Therefore, the correct answer is E, -$700,000.

If the Spread Effect Is Zero and All Interest Rates