Calculate the income gap for a financial institution with rate-sensitive assets of $20 million and rate-sensitive liabilities

Question:

Calculate the income gap for a financial institution with rate-sensitive assets of $20 million and rate-sensitive liabilities of $48 million. If interest rates rise from 4% to 4.8%, what is the expected change in income?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Financial Markets And Institutions

ISBN: 978-0132136839

7th Edition

Authors: Frederic S. Mishkin, Stanley G. Eakins

See More Books

Question Posted: Nov 12, 2012 01:15 AM

See More Questions

The bad debt ratio for a financial institution is defined to be the dollar value of loans defaulted divided by the total dollar value of all loans made. Suppose a random sample of seven Ohio banks is...
The bad debt ratio for a financial institution is defined to be the dollar value of loans defaulted divided by the total dollar value of all loans made. Suppose that a random sample of seven Ohio...
If interest rates rise after a bond issue, what will happen to the bonds price and YTM? Does the time to maturity affect the extent to which interest rate changes affect the bonds price? (Again, an...
4. In cells B4:B15, type a yearly salary for each staff member. Format these values as Currency with no decimal places. 5. Calculate the new salary with a 10% increase in column C. 6. Calculate the...
Let A be an m n matrix. (a) Explain why the matrix multiplications ATA and AAT are possible. (b) Show that ATA and AAT are both symmetric.
Consider the half-reaction Ag+(aq) + e- Ag(s). (a) Which of the lines in the following diagram indicates how the reduction potential varies with the concentration of Ag+? (b) What is the value of...
The kinematic viscosity of a certain solvent system depends on the ratio of the two solvents and the temperature. Table B. 10 summarizes a set of experimental results. a. Fit a multiple linear...
In another version of the "Giant Swing" (see Exercise 5.52), the seat is connected to two cables as shown in Fig. 5.58, one of which is horizontal. The seat swings in a h0ri2ontal circle at a rate of...
Williams Gear makes and sells three types of computer laptop sleeves: leather, fabric, and plastic. Management is trying to determine the most profitable mix. Sales prices, demand, and use of...
Your assignment is to participate in a Discussion of the cases to date. The discussion should center on (1) similarities and differences that exist among the cases, (2) what has been done to...
A banks balance sheet contains interest-sensitive assets of $280 million and interest-sensitive liabilities of $465 million. Calculate the income gap.
Calculate the income gap given the following items: $8 million in reserves $25 million in variable-rate mortgages $4 million in checkable deposits $2 million in savings deposits $6 million of...
The Northwoods Manufacturing Company has automated its production facilities dramatically during the last five years, to the extent that the number of direct-labor hours has remained steady while...
Determine all values of k for which the following matrices are linearly Independent in M 22. [12] [4 0 k 2 14
Amount issued $ 290 million Offered Issued at a price of 98.75% plus accrued interest (proceeds to company 98.717%) through Citi and JPMorgan. Interest 9.25% per annum payable June 15 and December...
Bank of Skagit issues 10-year bonds with a maturity date of 2032 and an annual simple interest rate of 5.8% The interest is paid semi-annually. Clayton buys a $10,000 bond. Determine the following:...
The Johnson Company is computing diluted earnings per share for the current year. The company has convertible bonds outstanding that have been judged as being anti-dilutive. What is the significance...
Should I include the financial ratio information in this document in the plan to the board of directors?
Write an application that reads a line of text, tokenizes the line using space characters as delimiters, and outputs only the words beginning with capital letters.
Without solving, determine the character of the solutions of each equation in the complex number system. 3x 2 3x + 4 = 0
A(n) ____________ ____________ is considered their own boss and works at their own pace in their own way.
What are some of the key characteristics of an embedded OS?
You are a financial consultant. At various times you have heard comments on interest rates from one of your clients. How would you respond to each comment? (a) Respond to: The yield curve is...
You observe the yields of the following Treasury securities (all yields are shown on a bond-equivalent basis): All the securities maturing from 1.5 years on are selling at par. The 0.5 and 1.0-year...
During the fall season, a retailer determined that in order to meet the next season's planned sales, the total amount of merchandise required next season was $360,000 at retail, with an initial...
Explore the role of collateralized debt obligations (CDOs) and collateralized loan obligations (CLOs) in securitizing and tranched collateralized credit exposures. How do structured finance vehicles,...
The faculty members from a local school voted to determine the winner of the "Student of the Year" award. The candidates were Ivanna, Tony, and Michael. The voting ballots are summarized in the...

Calculate the income gap for a financial institution with rate-sensitive assets of $20 million and rate-sensitive liabilities

Question:

Step by Step Answer:

GAP RSA RSL 20 mill...View the full answer

Financial Markets And Institutions

Students also viewed these Finance questions