Bank of the Atlantic Has Liabilities of $4 Million with an Average

Multiple Choice

Bank of the Atlantic has liabilities of $4 million with an average maturity of two years paying interest rates of 4.0 percent annually.It has assets of $5 million with an average maturity of 5 years earning interest rates of 6.0 percent annually.What is the maximum interest rate that it can refinance its $4 million liability and still break even on its net interest income in dollars?

A) 6.5 percent.
B) 7.0 percent.
C) 7.5 percent.
D) 8.0 percent.
E) 8.5 percent.