Question

Money Market deposit accts. = $7; Fixed rate CD’s = $6; Treasury notes = $8; Fed...

Money Market deposit accts. = $7; Fixed rate CD’s = $6; Treasury notes = $8; Fed Funds lending = $2; Savings Deposits = $2; Fixed rate loans = $17; Discount loans = $1.5; Reserves = $2.5; Equity Capital = $7; Treasury-bills = $9; Variable rate CD’s = $16; Fed Funds borrowing = $4; Demand deposits = $3; Variable rate mortgage loans = $8

A. Develop a balance sheet from the above data into assets and liabilities with a correct division of rate sensitive and non-rate sensitive as illustrated in class notes.

B. Perform a Standard Gap Analysis and a Duration Analysis using the above data if you have a 2.20% decrease in interest rates and an average duration of assets of 8.2 years and an average duration of liabilities of 3.3 years.

C. Determine the new level of equity capital.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Assets Liabilities Reserves 250 Deposits   Required __     Transaction (checking) deposits 1000   Excess __      Savings deposits 3000...
Assets Liabilities Reserves 250 Deposits   Required __     Transaction (checking) deposits 1000   Excess __      Savings deposits 3000 Loans    Money Market deposits 500     Variable rate loans 750 Time deposits (CDs)     Short-term loans 1600     Fixed rate 500    Long-term fixed rate loans    2000     Variable rate 100 Securities Borrowing    Short-term securities 500     Fed funds borrowed 0    Long-term securities 600 Refer to the bank balance sheet above. Calculate the gap between interest-sensitive assets and interest sensitive liabilities. Answer in millions and do not enter a $...
For problems 2 through 5 refer to the following balance sheeet: ASSETS                              &nbs
For problems 2 through 5 refer to the following balance sheeet: ASSETS                                                                   LIABILTIES Cash                                   20                                Core Deposits               60 Fed funds                           30                                Fed funds                     50 Loans (floating)                   80                                Euro CDs                       30 Loans (fixed)                       40                                Equity                           30 TOTAL                                170                                                                  170 The fixed rate loans are 10 year, 8% (annual) coupon bonds with a yield of 6%. Cash and fed funds have a 0 duration. Floating loans have a duration of 1.0. All liabilities have a duration of 0.50. 2.  What is the duration of the assets?  (3) 3.  What is the duration of the liabilities?  (3) 4.  What is the duration gap?  ...
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...
Assets Liabilities Reserves 250 Deposits   Required __     Transaction (checking) deposits 1000   Excess __      Savings deposits 3000...
Assets Liabilities Reserves 250 Deposits   Required __     Transaction (checking) deposits 1000   Excess __      Savings deposits 3000 Loans    Money Market deposits 500     Variable rate loans 750 Time deposits (CDs)     Short-term loans 1600     Fixed rate 500    Long-term fixed rate loans    2000     Variable rate 100 Securities Borrowing    Short-term securities 500     Fed funds borrowed 0    Long-term securities 600 Refer to the bank balance sheet above. Suppose values are in millions of dollars. Assume the reserve requirement is not tiered and is set at 10%....
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...
Assets Liabilities Reserves 250 Deposits   Required __     Transaction (checking) deposits 1000   Excess __      Savings deposits 3000...
Assets Liabilities Reserves 250 Deposits   Required __     Transaction (checking) deposits 1000   Excess __      Savings deposits 3000 Loans    Money Market deposits 500     Variable rate loans 750 Time deposits (CDs)     Short-term loans 1600     Fixed rate 500    Long-term fixed rate loans    2000     Variable rate 100 Securities Borrowing    Short-term securities 500     Fed funds borrowed 0    Long-term securities 600 Refer to the bank balance sheet above. Suppose values are in millions of dollars. Suppose return on assets (ROA) is 1.2%. Suppose bank owners convince bank...
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...
Question 3 The Balance Sheet of Hedge Row Bancorp (In Millions) is provided below. Asset Amount...
Question 3 The Balance Sheet of Hedge Row Bancorp (In Millions) is provided below. Asset Amount Liability & Equity Amount Cash (Non-Interest Earning) 10.0 Demand Deposit (One-Year Maturity) 70 Short Term Consumer Loan (One-year Maturity) 140 Demand Deposit (Two-year Maturity) 40 Long Term Consumer Loan (Two-Year Maturity) 150 Three-Month Certificate of Deposits (CDs) 140 Three-Month Treasury Bills 145 Three-Month Bankers Acceptances 100 Six-Month Treasury Notes 110 Six-Months Commercial Paper 155 Five-year Treasury Bond 85 One-Year Time Deposit 195 10 Year,...
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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT