The Following Are the Assets and Liabilities of a Government

Multiple Choice

The following are the assets and liabilities of a government security dealer. $$\begin{array} { | l | l | } \hline \text { Assets: } & \text { \$150 million } 30 \text { day Treasury bills } \\\hline & \text { \$275 million } 91 \text { day Treasury bills } \\\hline & \text { \$90 million } 180 \text { day municipal notes } \\\hline & \$ 350 \text { million } 2 \text { year Treasury notes } \\\hline & \\\hline \text { Liabilities: } & \text { \$575 million } 14 \text { day repurchase agreements } \\\hline & \$ 290 \text { million } 1 \text { year commercial paper } \\\hline\end{array}$$
-What is the impact over the next 30 days on the dealer's net interest income if all interest rates increase by 50 basis points?

A) Net interest income will decrease by $50,000.
B) Net interest income will decrease by $2.125 million.
C) Net interest income will decrease by $475,000.
D) Net interest income will decrease by $2.375 million.
E) Net interest income will increase by $750,000.