SourBank is quite certain that interest rates are going to increase next month. How should the bank  adjust the bank’s one-month repricing gap to increase the net interest income when interest rates increase ?Group of answer choicesThe bank should set its repricing gap to a positive position. In this case, as rates increase, market value of assets will increase by more than the increase in market value of liabilities. The bank should set its repricing gap to a negative position. In this case, as rates increase, interest expense will increase by less the increase than interest income.The bank should set its repricing gap to a positive position. In this case, as rates increase, interest income  will increase by more than the increase in interest expense.The bank should set its repricing gap to a negative position. In this case, as rates increase, market value of assets will increase by more than the increase in market value of liabilities.

Consider the following repricing buckets:Repricing Bucket  Assets Liabilities1 day $250,000 $300,0001 day to 3 months $150,000 $100,0003 to 6 months $300,000 $250,0006 to 12 months $500,000 $260,0001 to 5 years $150,000 $260,000Over 5 years $50,000 $200,000What is the change in the bank’s future net interest income if the average rate change for assets and liabilities that can be repriced within 6 months is an increase of 1%?Round your final answer to 2 decimal places.E.g. if the final  answer  is -$3,590 , type -3,590 in the answer box. If the final answer is $3,590 , type 3,590 in the  answer box (i.e do not type the dollar sign) .

When $1 million is deposited at a bank, the required reserve ratio is 20 percent, and thebank chooses not to hold any excess reserves but makes loans instead, then, in the bank'sfinal balance sheetA) the assets at the bank increase by $800,000.B) the liabilities of the bank increase by $1,000,000.C) the liabilities of the bank increase by $800,000.D) reserves increase by $160,000.

For a bank with a positive duration gap, an increase in interest rates will:Question 2Answerto.increase the likelihood of insolvency.b.does not affect the likelihood of insolvencyc.decrease the likelihood of insolvency.d.result in increased loan trading

The increase in interest rates...Domanda 5Rispostaa.Has no relationship with the bank's economic performance, being related to the value of financial assets included in the bank portfolio. In particular, an increase in interest rates produced a fall in the value of debt securities recorded at fair valueb.Has no relationship with the bank's economic performance, being related to the value of financial assets included in the bank portfolio. In particular, an increase in interest rates produced a growth in the value of debt securities recorded at fair valuec.Has in general produced a decrease in the bank’s economic performanced.Has in general determined a growth in the bank’s economic performancee.I don't know

Which of the following statements is TRUE?A.A positive repricing gap implies that a decrease in interest rates will cause interest expense to decrease more than the decrease in interest income. B.When the Reserve Bank finds it necessary to slow economic activity, it allows interest rates to fall. C.The repricing model estimates the difference between interest earned and interest paid during a given period of time. D.The repricing model is a simplistic approach to focusing on the exposure of net interest income to changes in market levels of interest rates for given maturity periods. E.If the average maturity of assets is 4 years and the average maturity of liabilities is 4 years, then the FI has no interest rate risk exposure.