Libor currently is 4 percent and both the loan and the, Financial Management

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Libor currently is 4 percent and both the loan and the

EDF Bank has a very simple balance sheet. Assets consist of a two-year, $1 million loan that pays an interest rate of LIBOR plus 4 percent annually. The loan is funded with a two-year deposit on which the bank pays LIBOR plus 3.25 percent interest annually. LIBOR currently is 4 percent, and both the loan and the deposit principal will be paid at maturity. What is the maturity gap on this balance sheet?

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