The Tidewater State Bank has $1,000 in total assets (all of which are earning assets), $700...

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Finance

The Tidewater State Bank has $1,000 in total assets (all ofwhich are earning assets), $700 of which will be repriced withinthe next 90 days. This bank also has $800 in total liabilities,$400 of which will be repriced within the next 90 days. Currently,the bank is earning 8 percent on its assets and is paying 5 percenton its liabilities.

If interest rates on both assets and liabilities decrease by 2percent in the next 90 days, what would be this bank's net interestmargin?
3.4 percent
4 percent
0.4 percent
5.6 percent
2 percent

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The Tidewater State Bank has $1,000 in total assets (all ofwhich are earning assets), $700 of which will be repriced withinthe next 90 days. This bank also has $800 in total liabilities,$400 of which will be repriced within the next 90 days. Currently,the bank is earning 8 percent on its assets and is paying 5 percenton its liabilities. If interest rates on both assets and liabilities decrease by 2percent in the next 90 days, what would be this bank's net interestmargin?3.4 percent4 percent0.4 percent5.6 percent2 percent