Discuss what impact each of the following will have, in general, on EVE sensitivity to a change in interest rates. Consider two cases where rates rise sharply and fall sharply.
a. Bank owns a high percentage of assets in bonds that are callable anytime after three months.
b. Bank pays below market rates on TDs, and market interest rates move sharply higher.
c. A large percentage of the bank's assets are in 30 year fixed rate mortgages