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FIN 401

1. What are the different types of risks the banks and other financial institutions are exposed to? explain [2 Marks]

2. What are the Asset-Liability Management Strategies? Explain. [2 Marks]

3. Explain the loanable fund theory of Interest Rate Determination. [2 Marks]

4. What are the different types of derivatives? Take an example and explain Interest rate swaps. [2 Marks]

5. Calculate the interest-sensitive GAP (IS GAP) and Relative IS GAP ratio for a financial institution if interest-sensitive assets (ISA) are $100 million and interest-sensitive liabilities (ISL) are $125 million. Is that firm an Asset sensitive? Explain. [2 Marks]