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The balance sheet of XYZ Bank appears below. All figures in millions of US Dolla...
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The balance sheet of XYZ Bank appears below. All figures in millions of US Dollars.
| Assets | Mil$ | Liabilities & Equity | Mil$ |
Short-term consumer loans (one-year maturity) | 150 | Overnight interbank funds | 160 |
| Two-year fixed-rate consumer loans | 125 | Three-month CDs | 130 |
Three-month treasury bills | 130 | Three-month bankers' acceptances | 140 |
Six-month treasury notes | 135 | Six-month commercial papers | 120 |
Three-year fixed-rate treasury bonds | 170 | One-year term deposits | 160 |
| Two-year fixed-rate business loans | 120 | Two-year fixed-rate term deposits | 140 |
30-year floating-rate mortgages (rate adjusted every nine months) | 140 | Equity capital | 120 |
| TOTAL ASSETS | 970 | TOTAL LIABILITIES & EQUITY | 970 |
Suppose that interest rates rise by 2% on both Rate-Sensitive Assets and Rate-Sensitive Liabilities in one-year time. The expected annual change in net interest income of the bank is:
0%
0%
100%
0%
0%