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A thrift has a negative annual CGAP of $35 million. A credit union has an annual...

A thrift has a negative annual CGAP of $35 million. A credit union has an annual CGAP of +$8 million. The thrift has total assets of $500 million and the credit union has total assets of $40 million. Assuming a zero spread effect, if all interest rates decrease 35 basis points, what is the change in NII for the thrift? For the credit union?

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Answer #1

Interest rate decrease by 35 basis point i.e.0.35%

35*0.35=$0.1225 mn decrease

40*0.35= $0.14 mn decrease

Let me know in comments if u want anything else

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