Business, 16.12.2021 23:40 trapvannah

A DI has assets of $18 million consisting of $8 million in cash and $10 million in loans. It has core deposits of $8 million. It also has $5 million in subordinated debt and $5 million in equity. Increases in interest rates are expected to result in a net drain of $2 million in core deposits over the year. a-1. The average cost of deposits is 5 percent and the average yield on loans is 8 percent. The DI decides to reduce its loan portfolio to offset this expected decline in deposits. What is the cost to the firm from this strategy after the drain

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A DI has assets of $18 million consisting of $8 million in cash and $10 million in loans. It has cor...

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