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    Federal Reserve Board & interest rates

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    Assume that the Federal Reserve Board holds the interest rates "as is" or constant.
    Discuss the impact this constant interest rate would have on three years of the FI's profitability.

    *FFIC (ticket symbol) and this would be the only FI needed for this question. The first two worksheets on the provided spreadsheet are the income and balance statements for FFIC. The last worksheet includes ratios.

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    The interest rates are determined by the Federal Reserve depending on the market situation. Interest rate fluctuations play a major role in the profitability of FIs. FIs usually break their revenue into fee-based which is non-interest based and non-fee based which is interest generated revenue to analyze the impact of changes in interest rate on revenue.
    While rise of interest rate scales up the amount of income FFIC receives on the new assets it acquires, a strong ...

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