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-If All Interest Rates Decrease by 15 Basis Points, What

Question 85

Multiple Choice

 Assets  Par Amount  Rate  Liabilities  Par Amount  Rate  2-year commercial loans $600 million 10% 1-year CDs $900 million 7% 1-year Treasury bills $400 million  Net Worth $100 million \begin{array} { | l | l | l | l | l | l | } \hline \text { Assets } & \text { Par Amount } & \text { Rate } & \text { Liabilities } & \text { Par Amount } & \text { Rate } \\\hline \text { 2-year commercial loans } & \$ 600 \text { million } & 10 \% & \text { 1-year CDs } & \$ 900 \text { million } & 7 \% \\\hline \text { 1-year Treasury bills } & \$ 400 \text { million } & & \text { Net Worth } & \$ 100 \text { million } & \\\hline\end{array}
-If all interest rates decrease by 15 basis points, what is the expected impact on the FI's net interest income? (Hint: Use the repricing model to answer this question.)


A) +$150,000.
B) -$150,000.
C) -$750,000.
D) +$750,000.
E) No changE.

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