Assets Liabilities and Equity Cash $75 Demand deposits $125 15-year commercial loan at 10% 5-year CDs...

 

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Assets Liabilities and Equity Cash $75 Demand deposits $125 15-year commercial loan at 10% 5-year CDs at 6% interest, interest, balloon payment 30-year mortgages at 8% interest, 215 balloon payment 275 20-year debentures at 7% interest, 150 balloon payment 360 balloon payment Equity Total assets $650 Total liabilities & equity 100 $650 a) What is the maturity gap for County Bank? b) What will be the maturity gap if the interest rates on all assets and liabilities increase by 1%? c) What will happen to the market value of the equity? Assets Liabilities and Equity Cash $75 Demand deposits $125 15-year commercial loan at 10% 5-year CDs at 6% interest, interest, balloon payment 30-year mortgages at 8% interest, 215 balloon payment 275 20-year debentures at 7% interest, 150 balloon payment 360 balloon payment Equity Total assets $650 Total liabilities & equity 100 $650 a) What is the maturity gap for County Bank? b) What will be the maturity gap if the interest rates on all assets and liabilities increase by 1%? c) What will happen to the market value of the equity?

Answer rating: 100% (QA)

a The maturity gap is the difference between the average maturity ... View the full answer