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Q1. XYZ Bank recently published a report of Condition and Report of Income. The bank reported...

Q1.

XYZ Bank recently published a report of Condition and Report of Income. The bank reported net income before taxes and security transactions of $44.4 million and taxes of $8 million. If total operating revenues were $950 million, equity capital $250 million and total assets $2.7 billion.

Determine the ‘Tax management efficiency’ ratio and the ‘Expense control efficiency’ ratio. (just do the maths shortly)

Q2.
A financial firm holds bond in its investment portfolio whose duration is 15 years. Its current market price is $975. While the market interest rate is currently at 6 percent for securities, a decrease in interest rate to 5.75 percent is expected in the coming weeks. What change (in percentage terms) will this bond price experience if interest rate changes as anticipated? Give proper explanations.(around 3 lines only)

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