Eagle Bank has the following interest-sensitive assets and interest-sensitive liabilities. Amount maturing in 30 days (million) Amount maturing in 30 days (million) 810 570 63 330 116 Interest-sensitive assets Loans Securities Interest rate on interest-sensitive assets is 5% Interest rate on interest-sensitive liabilities is 3% Interest-sensitive liabilities Savings deposits Time deposits Money market The interest rate is expected to rise 1% (for both interest-sensitive assets and liabilities) 30 days later. Will Eagle Bank benefit from the interest rate rise? Explain your answer. Show your calculations.

Eagle Bank has the following interest-sensitive assets and interest-sensitive liabilities. Amount maturing in 30 days (million) Amount maturing in 30 days (million) 810 570 63 330 116 Interest-sensitive assets Loans Securities Interest rate on interest-sensitive assets is 5% Interest rate on interest-sensitive liabilities is 3% Interest-sensitive liabilities Savings deposits Time deposits Money market The interest rate is expected to rise 1% (for both interest-sensitive assets and liabilities) 30 days later. Will Eagle Bank benefit from the interest rate rise? Explain your answer. Show your calculations.

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter7: Types And Costs Of Financial Capital

Section: Chapter Questions

Problem 2EP

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