Consider the following bank: a. Loans 3-month Prime + 3% Reset semi-annually Bank COVID 1200 Deposits...
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Consider the following bank: a. Loans 3-month Prime + 3% Reset semi-annually Bank COVID 1200 Deposits 3-month T-Bill + 1.5% Reset semi-annually 1200 Total 1200 Total 1200 What is Bank COVID's current spread if 3-month Prime is currently 3.0% and 3- month T-Bill is currently 1.5%? b. Suppose after six months, rates change. The new 3-month Prime remains 3.0%, but 3-month T-Bill changes to 2.0%. What will be Bank COVID's spread then? (not exponential) Consider the following bank: a. Loans 3-month Prime + 3% Reset semi-annually Bank COVID 1200 Deposits 3-month T-Bill + 1.5% Reset semi-annually 1200 Total 1200 Total 1200 What is Bank COVID's current spread if 3-month Prime is currently 3.0% and 3- month T-Bill is currently 1.5%? b. Suppose after six months, rates change. The new 3-month Prime remains 3.0%, but 3-month T-Bill changes to 2.0%. What will be Bank COVID's spread then? (not exponential)
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