What do the following terms mean: Asset management? Liability management? Funds management?
Answer to relevant QuestionsWhat factors have motivated financial institutions to develop funds management techniques in recent years?Can you explain the concept of gap management?What are the principal limitations of duration gap analysis? Can you think of some way of reducing the impact of these limitations?A government bond is currently selling for $1,195 and pays $75 per year in interest for 14 years when it matures. If the redemption value of this bond is $1,000, what is its yield to maturity if purchased today for $1,195? Sparkle Savings Association has interest-sensitive assets of $400 million, interest-sensitive liabilities of $325 million, and total assets of $500 million. What is the bank’s dollar interest-sensitive gap? What is ...
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