First National Bank of America has more than 75% of its assets in first residential fixed-rate mortgages that mature in more tha
n 5 years. Suppose that a 12-month Gap Analysis predicts a decrease in 2021 interest income of $3 million if there is a sudden 1% drop in market interest rates. From your knowledge of the practical flaws in gap analysis, a realistic simulation analysis would predict that:_______. 1. Interest income will drop by more than $3 million for a sudden 1% drop in market interest rates
2. Interest income will drop by less than $3 million for a sudden 1% drop in market interest rates
2. Interest income will drop by less than $3 million for a sudden 1% drop in market interest rates
Explanation:
Since in the question it is mentioned that there is decrease in 2021 interest income of $3 million in the case when there is a sudden decline of 1% in the rate of interest of the market this is due to the convexity of the curve as the GAP analysis and assume straight line
In his landmark essay on the nature of economics, Lionel Robbins defined economics as. “the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses”
You have to have permission from the owner and the banks to have part owner ship of anything and it can also be written out and signed from the owners them selfs.
