Use the data provided for Gotbucks Bank, Inc., to answer this
question.
Gotbucks Bank, Inc. (in...
Use the data provided for Gotbucks Bank, Inc., to answer this
question.
Gotbucks Bank, Inc. (in $ millions)
Assets
Liabilities and Equity
Cash
$
45
Core deposits
$
28
Federal funds
35
Federal funds
65
Loans
(floating)
120
Euro CDs
145
Loans (fixed)
80
Equity
42
Total assets
$
280
Total liabilities
and equity
$
280
Notes to the balance sheet: Currently, the fed funds rate is 10
percent. Variable-rate loans are priced at 3 percent over LIBOR
(currently at...
BankBoston Balance Sheet
Assets
Liabilities
Cash
30
Core Deposits
20
Federal Funds (8.5%, .36)
20
Federal...
BankBoston Balance Sheet
Assets
Liabilities
Cash
30
Core Deposits
20
Federal Funds (8.5%, .36)
20
Federal Funds (8.5%, .401)
50
Loans (Fixed) (12%, x)
105
Euro CDs (9%, .401)
130
Loans Floating (Libor +4%, .36)
65
Equity
20
Total Assets
220
Total Liabilities and Equity
220
Notes: Libor is 11%. Fixed rate loans have five-year
maturities, and are priced at par, principal is repaid at
maturity.
1.What is the duration of the fixed rate
loans?
2.What is the duration of...
1.Suppose the Fed conducts an open market purchase by selling
$10 million in Treasury bonds to...
1.Suppose the Fed conducts an open market purchase by selling
$10 million in Treasury bonds to Wakanda Bank. What will the new
balance sheet look like after Wakanda Bank restores its required
reserves by reducing its loans? The initial Wakanda Bank balance
sheet contains the following information:
Assets: Reserves = $30, Bonds = $50, and Loans = $250
Liabilities: Deposits = $300, and Equity = $30
Reserves = $20, Bonds = $60, Loans = $260, Deposits = $300, and
Equity...
Current Assets 30,000,000 Current Liabilities 20,000,000
Fixed Assets 70,000,000 Notes Payable 10,000,000
Total Assets: 100,000,000 Long-term...
Current Assets 30,000,000 Current Liabilities 20,000,000
Fixed Assets 70,000,000 Notes Payable 10,000,000
Total Assets: 100,000,000 Long-term debt 30,000,000
Common Stock 1,000,000
Retained Earnings 39,000,000
Total liabilities & Equity 100,000,000
The notes payable are to banks, and the interest rate on this
debt is 7%, the same as the rate on new bank loans. These bank
loans are not used for seasonal financing but instead are part of
the company's permanent capital structure. The long-term debt
consists of 30,000 bonds, each...
26. The following balance sheet information is available
(amounts in thousands of
dollars and duration in...
26. The following balance sheet information is available
(amounts in thousands of
dollars and duration in years) for a financial institution:
Amount Duration
T-bills
T-notes
T-bonds
Loans
Deposits
Federal funds
Equity
$ 90
55
176
2,724
2,092
238
715
0.50
0.90
x
7.00
1.00
0.01
Treasury bonds are five-year maturities paying 6 percent
semiannually and sell-
ing at par.
a. What is the duration of the T-bond portfolio?
b. What is the average duration of all the assets?
c. What...