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Question: First National Bank of Fluffy Clouds currently has the following interest-sensitive assets and liabilities on its balance sheet with the interest-rate sensitivity weights noted.

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What is the bank's current interest-sensitive gap? Adjusting for these various interest-rate sensitivity weights what is the bank's weighted interest-sensitive gap? Suppose the federal funds interest rate increases or decreases one percentage point. How will the bank's net interest income be affected

(a) given its current balance sheet makeup and

(b) reflecting its weighted balance sheet adjusted for the foregoing rate-sensitivity indexes?

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