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Consider the Following Repricing Buckets and Gaps What Is the Annualised Change in the Bank's Future Net

Question 11

Multiple Choice

Consider the following repricing buckets and gaps:  Repricing bucket 1 day 1 day to 3 months 3 to 6 months 6 to 12 months 1 to 5 years  Over 5 years  Assets $50000$100000$100000$250000575000325000 Liabilities $120000$70000$100000$80000$130000$100000 Gaps $70000$30000$0$170000$55000$75000 Cumulative gap $70000$40000$40000$130000$75000$0\begin{array}{c}\begin{array}{|l|}\hline \text { Repricing bucket }\\\hline 1 \text { day } \\\hline 1 \text { day to } 3 \text { months } \\\hline 3 \text { to } 6 \text { months } \\\hline 6 \text { to } 12 \text { months } \\\hline 1 \text { to } 5 \text { years } \\\hline \text { Over } 5 \text { years } \\\hline\end{array}\begin{array}{r|}\hline\text { Assets } \\\hline \$ 50000 \\\hline \$ 100000 \\\hline \$ 100000 \\\hline \$ 250000 \\\hline 575000 \\\hline 325000 \\\hline \end{array}\begin{array}{|r|}\hline\text { Liabilities }\\\hline \$ 120000 \\\hline \$ 70000 \\\hline \$ 100000 \\\hline \$ 80000 \\\hline \$ 130000 \\\hline \$ 100000 \\\hline \end{array}\begin{array}{r|}\hline\text { Gaps }\\\hline-\$ 70000 \\\hline \$ 30000 \\\hline \$ 0 \\\hline \$ 170000 \\\hline-\$ 55000 \\\hline-\$ 75000 \\\hline\end{array} \begin{array}{r|}\hline\text { Cumulative gap }\\\hline-\$ 70000 \\\hline-\$ 40000 \\\hline-\$ 40000 \\\hline \$ 130000 \\\hline \$ 75000 \\\hline \$ 0 \\\hline\end{array}\end{array}



What is the annualised change in the bank's future net interest income if the average rate change for assets and liabilities that can be repriced over five years is an increase of 50 basis points?


A) $7500
B) $75 000
C) $0
D) Not enough information to answer the question.

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