An FI Finances a $250,000 2-Year Fixed-Rate Loan with a $200,000

An FI finances a $250,000 2-year fixed-rate loan with a $200,000 1-year fixed-rate CD.Use the repricing model to determine (a) the FI's repricing (or funding) gap using a 1-year maturity bucket,and (b) the impact of a 100 basis point (0.01) decrease in interest rates on the FI's annual net interest income?

A) $0;$0.
B) -$200,000;+$2,000.
C) -$200,000;-$2,000.
D) +$50,000;-$500.

Correct Answer:

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