a. Take the following balance sheet, which of the assets and labilities are rate-sensitive? Which assets...

 

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a. Take the following balance sheet, which of the assets and labilities are rate-sensitive? Which assets and liabilities are not? Amount (mil.) Assets Long-Term Loans Long-Term Securities Reserves Short-Term Securities Variable-Rate Loans 75 26 54 15 30 Liabilities Checkable Deposits Savings Deposits Money Market Accounts Variable Rate CDs Amount (mil.) 40 100 10 25 Long-Term CDs 25 b. What is the estimated rate of change of bank profit, in terms of next year's interest rate, conditional on this year's interest rate being 2%? c. Suppose that all the long-term securities that the bank holds mature in 4 years and their interest rate will be 5% in that year. What is the approximate market-value of these long-term securities in 4 years? a. Take the following balance sheet, which of the assets and labilities are rate-sensitive? Which assets and liabilities are not? Amount (mil.) Assets Long-Term Loans Long-Term Securities Reserves Short-Term Securities Variable-Rate Loans 75 26 54 15 30 Liabilities Checkable Deposits Savings Deposits Money Market Accounts Variable Rate CDs Amount (mil.) 40 100 10 25 Long-Term CDs 25 b. What is the estimated rate of change of bank profit, in terms of next year's interest rate, conditional on this year's interest rate being 2%? c. Suppose that all the long-term securities that the bank holds mature in 4 years and their interest rate will be 5% in that year. What is the approximate market-value of these long-term securities in 4 years?

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a The assets that are ratesensitive are longterm loans longterm securities and variablerate loans Th... View the full answer