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

The Tidewater State Bank has $1,000 in total assets (all of which are earning assets), $700 of which will be repriced within the 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 percent on its liabilities.

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

		3.4 percent
		4 percent
		0.4 percent
		5.6 percent
		2 percent

Expert Solution

jeff jeffy answered 2 years ago

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