Suppose a bank has a "gap" of -$55 million dollars. If interest rates rise by 2%,...

Question

Question

Suppose a bank has a "gap" of -$55 million dollars. If interest rates rise by 2%, then the change in profits is how many million?

business economics

Answer 1

Answer #1

Gap = 55 million

Interest rises by 2%

The change in profits = 2%*(55 million)

= 1.1 million

Answer 2

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