Suppose that XYZ Bank's balance sheet is: Asset (million cedis) Loans 200 Total 200 Liabilities (million...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Suppose that XYZ Bank's balance sheet is: Asset (million cedis) Loans 200 Total 200 Liabilities (million cedis) Deposit 160 Equity 40 Total 200 Assume that the duration of the asset is 5 years and that of the liability is 3 years. The bank expects interest rate to rise by 1% from the current level of 10%. a) Calculate the potential loss on the bank's net worth. b) Prepare the bank's balance sheet after the rate change. Suppose that XYZ Bank's balance sheet is: Asset (million cedis) Loans 200 Total 200 Liabilities (million cedis) Deposit 160 Equity 40 Total 200 Assume that the duration of the asset is 5 years and that of the liability is 3 years. The bank expects interest rate to rise by 1% from the current level of 10%. a) Calculate the potential loss on the bank's net worth. b) Prepare the bank's balance sheet after the rate change. Suppose that XYZ Bank's balance sheet is: Asset (million cedis) Loans 200 Total 200 Liabilities (million cedis) Deposit 160 Equity 40 Total 200 Assume that the duration of the asset is 5 years and that of the liability is 3 years. The bank expects interest rate to rise by 1% from the current level of 10%. a) Calculate the potential loss on the bank's net worth. b) Prepare the bank's balance sheet after the rate change. Suppose that XYZ Bank's balance sheet is: Asset (million cedis) Loans 200 Total 200 Liabilities (million cedis) Deposit 160 Equity 40 Total 200 Assume that the duration of the asset is 5 years and that of the liability is 3 years. The bank expects interest rate to rise by 1% from the current level of 10%. a) Calculate the potential loss on the bank's net worth. b) Prepare the bank's balance sheet after the rate change. Suppose that XYZ Bank's balance sheet is: Asset (million cedis) Loans 200 Total 200 Liabilities (million cedis) Deposit 160 Equity 40 Total 200 Assume that the duration of the asset is 5 years and that of the liability is 3 years. The bank expects interest rate to rise by 1% from the current level of 10%. a) Calculate the potential loss on the bank's net worth. b) Prepare the bank's balance sheet after the rate change. Suppose that XYZ Bank's balance sheet is: Asset (million cedis) Loans 200 Total 200 Liabilities (million cedis) Deposit 160 Equity 40 Total 200 Assume that the duration of the asset is 5 years and that of the liability is 3 years. The bank expects interest rate to rise by 1% from the current level of 10%. a) Calculate the potential loss on the bank's net worth. b) Prepare the bank's balance sheet after the rate change. Suppose that XYZ Bank's balance sheet is: Asset (million cedis) Loans 200 Total 200 Liabilities (million cedis) Deposit 160 Equity 40 Total 200 Assume that the duration of the asset is 5 years and that of the liability is 3 years. The bank expects interest rate to rise by 1% from the current level of 10%. a) Calculate the potential loss on the bank's net worth. b) Prepare the bank's balance sheet after the rate change. Suppose that XYZ Bank's balance sheet is: Asset (million cedis) Loans 200 Total 200 Liabilities (million cedis) Deposit 160 Equity 40 Total 200 Assume that the duration of the asset is 5 years and that of the liability is 3 years. The bank expects interest rate to rise by 1% from the current level of 10%. a) Calculate the potential loss on the bank's net worth. b) Prepare the bank's balance sheet after the rate change.
Expert Answer:
Related Book For
Financial Institutions Management A Risk Management Approach
ISBN: 978-0071051590
8th edition
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
Posted Date:
Students also viewed these accounting questions
-
Assume that the duration of human pregnancies can be described by a Normal model with mean 266 days and standard deviation 16 days. a) What percentage of pregnancies should last between 270 and 280...
-
A commercial bank has $ 200 million of floating-rate loans yielding the T-bill rate plus 2 percent. These loans are financed by $ 200 million of fixed-rate deposits costing 9 percent. A savings...
-
On 1 Jan 20XX, Bank XYZ makes 100 million available to the ABC SPV at a 5% fixed rate with a commitment fee of 0.8%. On the same day, the company decides to use 45 million of the committed amount....
-
The Shannon Township Debt Service Fund accumulates resources to pay its $2 million general obligation debt. The debt is payable in equal annual installments of principal over 10 years with 5%...
-
1. Describe the problems characterized in this case. 2. What are the likely causes of these problems? 3. What are consequences of these problems for investors, Czech companies, and the Prague Stock...
-
The current price of DISH Network stock is $31.50 per share, and six-month European call options on the stock with a strike price of $32.50 are currently trading at $3.60. An investor, who has...
-
What are two key measurements a field technician can see at a proximity probe readout?
-
The 21st Century Studios is about to begin the production of its most important (and most expensive) movie of the year. The movies producer, Dusty Hoffmer, has decided to use PERT/CPM to help plan...
-
Q2- Consider the mechanism shown. Find the ICZV of bar BC and the angular velocity of bar CD, at the instant shown, given WAB = -1 k rad/s 6 in. B 30 C 4 in. WCD 45 D 8 in.
-
Easley-O?Hara Office Equipment sells furniture and technology solutions to consumers and to businesses. Most consumers pay for their purchases with credit cards and business customers make purchases...
-
On 1" January 2014, Omar Bhd acquired 80% of the issued ordinary share capital of Amar Bhd of 5,000,000 shares of RM 1 each. On that date, the reserves of Amar Bhd consisted of share premium of RM...
-
Give a tight asymptotic run time analysis ( notation) for the following pseudo-code snippet: sum - 0 for i 1 to n do forj -1 to 1 do sum sumary[i]
-
how do you calcuate Unit Profit, Sales, and Profit in excel?
-
How do you ensure that processes are set up to respond to Internet information requests in a timely fashion?
-
3a) Convert the following C code to assembler 3b) Give a flow chart for this code. unsigned char A, i; while (1) ( A = A + 1; for (i 0; i <10; i++); }
-
import java.util.Scanner; class Main { public static void main(String[] args) { // Scanner is used for getting input. // Don't worry about this now. Scanner input = new Scanner(System.in); // These...
-
Suppose A is a 2 x 2 matrix, where u= 0 Au = 4 3 -15 Au = The minimal polynomial of A with respect to u is and make the leading coefficient equal to 1) 6 -30 Au = -5 2 -10 (Use x for the variable,
-
Determine the center and radius of each circle. Sketch each circle. 4x 2 + 4y 2 9 = 16y
-
The balance sheet of A. G. Fredwards, a government security dealer, is listed below. Market yields are in parentheses, and amounts are in millions. a. What is the repricing gap if the planning period...
-
Explain how technological improvements can increase an FIs interest and noninterest income and reduce interest and noninterest expenses. Use some specific examples.
-
Suppose that a bank does the following: 1. Sets a loan rate on a prospective loan at 8 percent (where BR = 5% and = 3%). 2. Charges a 1/10 percent (or 0.10 percent) loan origination fee to the...
-
To what amount will the following investments accumulate? a. $6,000 invested for 12 years at 12 percent compounded annually b. $7,500 invested for 8 years at 8 percent compounded annually c. $6,400...
-
What is the present value of the following future amounts? a. $805 to be received 10 years from now discounted back to the present at 10 percent b. $376 to be received 5 years from now discounted...
-
At what annual rate would the following have to be invested? a. \($820\) to grow to \($1,988.12\) in 13 years b. \($320\) to grow to \($423.10\) in 6 years c. \($57\) to grow to \($290.30\) in 18...
Study smarter with the SolutionInn App