D3. The balance sheet of Bayes Bank is represented in the table below. All figures are inmillions of US Dollars. Use the information in the table, to answer the question below.LiabilitiesAssets3-month Treasury bills6-month Treasury notes1-year consumer loans2-year consumer loans3-year Treasury bond10-year, fixed-ratemortgages30-year, floating-ratemortgages (rate adjustedevery nine months)Total Assets1303-month CDs1353-month bankersacceptances$1506-month commercialpaper1251-year time deposits1702-year time deposits120 2-year demanddeposits140 Equity capital$970 Total Liabilities140120O a. The net interest income will go up by 3O b. The net interest income will go down by 6O c. The net interest income will go down by 30O d. The net interest income will go up by 6016012040170120$9704The chief risk officer is expecting an interest rate increase of 20% in one year horizon. What is theimpact of that increase in the value of net interest income in 1-year horizon?

The Balance Sheet of Bayes Bank is represented in the question , if interest rate expected to…

Answered: The balance sheet of Bayes Bank is…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Consider the following balance sheet for Northern Highland Credit Union (NHCU) before answering parts (i) through (v). Assets ($ million) $ Liabilities ($ million) $ Cash 30 Overnight interbank borrowing (7.00%) 160 T-notes 2 month (7.05%) 60 2-year CD (5%) 20 T-notes 3 months (7.25%) 80 7 year fixed rate Subordinated debt (8.55%) 150 T-notes two-year (7.50%) 60 Equity 25 T-notes 10-year (8.96%) 100 Corporate bonds (>5 years to maturity) 25 Total assets 355 Total liabilities and Equity 355 What is the repricing (funding) gap over the 0-to-6 months maturity bucket?
The following information is for AmBank. The ECR reflects the relationship of each account's rate to the prime rate. Rate Sensitive Assets 1-year Balance Sheet GAP ECR Loans $55,120,000 82% Securities $28,615,000 67% Rate Sensitive Liabilities MMDAS $41,640,000 34% NOWS $37,260,000 90% CDs >= $100,000 $20,975,000 85% Using this information, how much will NII change if the prime rate rises 1%?
Eagle Bank has the following interest-sensitive assets and interest-sensitive liabilities. Amount maturing in Amount maturing in 30 days (million) 570 330 116 Interest-sensitive assets Loans Securities 30 days (million) 810 63 Interest rate on interest-sensitive assets is 5% Interest rate on interest-sensitive liabilities is 3% Interest-sensitive liabilities Savings deposits Time deposits Money market The interest rate is expected to rise 1% (for both interest-sensitive assets and liabilities) 30 days later. Will Eagle Bank benefit from the interest rate rise? Explain your answer. Show your calculations.
Following are the balances of Bank Muscat for the year ended as on 31st December 2020 (Amounts are in 000’ OMR) PARTICULARS OMR Interest on Savings Account 6,000 Interest on Fixed Deposits 33,000 Interest on Loans 19,200 Rent and Rates 1,500 Interest on Current Account 4,500 Interest on Cash Credits 16,800 Discounts received 21,000 Commission Expenses 600 Commission Received 2,400 Director’s Fees 150 Salaries and Allowances 6,000 Interest on Overdrafts 18,000 Interest on borrowings from other banks 1,500 Legal Charges 90 Transfer Fees paid 1,200 Locker Rent 1,800 Other office expenses 120 Depreciation on Fixed Assets 6,000 Miscellaneous Expenses 1,200 Other Adjustments: Fair value of sale of investments were increased by: OMR 3,600 Loss on exchange difference arising on transactions of foreign operations was: OMR 600 Income tax expenses: OMR 9,000…
The following balance sheet is to be used to answer the questions below Yields for assets & liabilities shown in % in parentheses Assets $M Liabilities & Equity $M Cash & Cash Equivalents 85 Overnight Repurchase Agreements 650 1 - month Treasury Bills (3%) 125 5 - year Fixed-rate Debt (4.5%) 450 3 - month Commercial Paper (3.75 %) 175 2 - year Consumer Loans (4.25 %) 235 Equity 160 5-year Adjustable -Rate Mortgages (3.5% resetting semiannually) 540 5 - year Fixed rate Municipal Bonds (4%) 100 Total Assets 1260 Total Liabilities & Equity 1260 a. Calculate the firm's repricing gap over the following intervals: $M 30 Days 90 Days 2 Years b. Compute the impact over the next 90 days on net interest income under the following changes in interest rates $M +75bps -100bps c. Runoffs on consumer and mortgage loans over the next year above are $30M and $50M, respectively What would be the 1 - year repricing gap? $M d. Taking into account the effect of runoffs, what is the effect on net interest…
Following are the balances of Bank Muscat for the year ended as on 31st December 2020 (Amounts are in 000’ OMR) PARTICULARS OMR Interest on Savings Account 6,000 Interest on Fixed Deposits 33,000 Interest on Loans 19,200 Rent and Rates 1,500 Interest on Current Account 4,500 Interest on Cash Credits 16,800 Discounts received 21,000 Commission Expenses 600 Commission Received 2,400 Director’s Fees 150 Salaries and Allowances 6,000 Interest on Overdrafts 18,000 Interest on borrowings from other banks 1,500 Legal Charges 90 Transfer Fees paid 1,200 Locker Rent 1,800 Other office expenses 120 Depreciation on Fixed Assets 6,000 Miscellaneous Expenses 1,200 Other Adjustments: Fair value of sale of investments were increased by: OMR 3,600 Loss on exchange difference arising on transactions of foreign operations was: OMR 600 Income tax expenses: OMR 9,000 Impairment for loans: OMR 300 Impairment for investments: OMR 2,700 Rebate on bills…
Following are the balances of Bank Muscat for the year ended as on 31st December 2020 (Amounts are in 000’ OMR) PARTICULARS OMR Interest on Savings Account 6,000 Interest on Fixed Deposits 33,000 Interest on Loans 19,200 Rent and Rates 1,500 Interest on Current Account 4,500 Interest on Cash Credits 16,800 Discounts received 21,000 Commission Expenses 600 Commission Received 2,400 Director’s Fees 150 Salaries and Allowances 6,000 Interest on Overdrafts 18,000 Interest on borrowings from other banks 1,500 Legal Charges 90 Transfer Fees paid 1,200 Locker Rent 1,800 Other office expenses 120 Depreciation on Fixed Assets 6,000 Miscellaneous Expenses 1,200 Other Adjustments: Fair value of sale of investments were increased by: OMR 3,600 Loss on exchange difference arising on transactions of foreign operations was: OMR 600 Income tax expenses: OMR 9,000 Impairment for loans: OMR 300 Impairment for investments: OMR 2,700 Rebate on bills…
You are told that a note has repayment terms of $1,700 per quarter for 6 years, with a stated interest rate of 8%. How much of the total payment is for principal, and how much is for interest? Calculate using (a) financial calculator or (b) Excel function PV. (Round answers to 2 decimal places, eg. 5,275.25.) Total payment for principal Total interest Determine if the total interest will be higher or lower than with an annual payment. The total interest will be than with an annual payment.
Use the data provided for Gotbucks Bank, Incorporated, to answer this question. Gotbucks Bank, Incorporated (dollars in millions) Assets Liabilities and Equity $ 45 Core deposits 35 Federal funds Cash $ 28 Federal funds 65 Loans (floating) Loans (fixed) 120 Euro CDs 145 80 Equity $ 280 Total liabilities and equity 42 Total assets $ 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 11 percent). Fixed-rate loans are selling at par and have five-year maturities with 12 percent interest paid annually. Assume that fixed rate loans are non-amortizing. Core deposits are all fixed rate for two years at 8 percent paid annually. Euro CDs currently yield 9 percent. a. What is the duration of Gotbucks Bank's (GBI) fixed-rate loan portfolio if the loans are priced at par? (Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161)) b. If the average duration of GBI's…
Consider the following balance sheet for Whiz Financial Services Limited: Assets K Liabilities K Cash 6.25 Equity 25.00 Short term consumer loans (1 yr maturity)62.50 Demand deposits 50.00 Long term consumer loans (2 yr maturity)31.25 Client Savings accounts 37.50 3 month T-Bills 37.50 3 month CDs 50.00 6 month T-Bills 43.75 3 months Bankers Acceptances 25.00 3 year T-Bonds 75.00 6 month commercial paper 75.00 10 year, fixed rate mortgages 25.00…
A bank has three assets. It has $75 million invested in consumer loans with a three-year duration, $39 million invested in T-bonds with a 15-year duration, and $19 million in six-month maturity T-bills. What is the duration of the bank's asset portfolio in years? A) 3.95 years B) 6.16 years C) 6.50 years D) 7.38 years E) 11.51 years
Determine the dollar settlement of the 3 x 6 FRA for the amount $300,000 assuming (a) the settlement occurs on the date of loan initiation and (b) if settlement occurs on the date of loan repayment. Use the following data to carry out the calculations. Interest rates are expressed as stated annual interest rates.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS