Assets Cash Loans T-Bond Total O $17.71 O $22.88 What is the bank's interest expense? O$34.12 $150 00 $600.00 $450.00 $1,200 00 $47.90 $50.63 6.00% 3.00% Time Deposits 2.75 CDs 6.50 Equity Total $750 00 $400.00 $50.00 $1,200 00 2.25% 1.50%
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- Assets Market Value Cash $150.00 Loans $600,00 T-Bond Total 1.97 124 $450.00 $1,200.00 What is the bank's duration gap? 0.55 Ⓒ-0.69 Ⓒ-162 Rate 6.00% 3.00% Duration (Years) Liabilities and Equity Time Deposits CDs 275 8.50 Equity Total Market Value $750.00 $400.00 $50.00 $1,200.00 Rate 225% 1.50% Duration (Years) 1.75 4.50Question 3. Bond Consider a bank with the following balance sheet (M means million): Assets 5yr bond bought at a yield of 3.4% (lending money) 12yr bond bought at a yield of 4% (lending money) Liabilities 2yr bond sold at a yield of 2.4% (borrowing money) 4yr bond sold at a yield of 2.8% (borrowing money) Value $550M $800M Duration of the Asset 4.562 9.453 Convexity of the Asset 12.026 53.565 Convexity of the Liability 2.384 8.206 Value$300M 1.941 Duration of the Liability $500M 3.759 a) Calculate the equity (total asset – total liability) to asset ratio of the bank (Hint: equity to asset ratio = total equity/total asset) b) Calculate the duration and convexity of the both asset and liability sides; c) If the interest rates go up by 1%, using the duration and convexity rule to determine the net worth of the bank and the equity to asset ratio; d) In c)’s scenario, to maintain the equity to asset ratio at 40% which is required by the…Question 3. Bond Consider a bank with the following balance sheet (M means million): Assets 5yr bond bought at a yield of 3.4% (lending money) 12yr bond bought at a yield of 4% (lending money) Liabilities 2yr bond sold at a yield of 2.4% (borrowing money) 4yr bond sold at a yield of 2.8% (borrowing money) Value $550M $800M Duration of the Asset 4.562 9.453 Convexity of the Asset 12.026 53.565 Convexity of the Liability 2.384 8.206 Value$300M 1.941 Duration of the Liability $500M 3.759 1) If the interest rates go up by 1%, using the duration and convexity rule to determine the net worth of the bank and the equity to asset ratio 2)In 1)‘s scenario, to maintain the equity to asset ratio at 40% which is required by the regulation, the bank decides to raise cash (zero duration and zero convexity) from the equity holders. How much cash does the bank need to raise? 3)Do you agree with the following statement? Explain why. “The information about a bond’s…
- Assignment Q. = Ken recieved 30000 of interest from corporate bonds and money market accounts. Ans & what line on form 1040?Please question A B and C is required Bond Consider a bank with the following balance sheet (M means million): Assets Value Duration of the Asset Convexity of the Asset 5yr bond bought at a yield of 3.4% (lending money) $550M 4.562 12.026 12yr bond bought at a yield of 4% (lending money) $800M 9.453 53.565 Liabilities Value Duration of the Liability Convexity of the Liability 2yr bond sold at a yield of 2.4% (borrowing money) $300M 1.941 2.384 4yr bond sold at a yield of 2.8% (borrowing money) $500M 3.759 8.206 a) Calculate the equity (total asset – total liability) to asset ratio of the bank (Hint: equity to asset ratio = total equity/total asset) b) Calculate the duration and convexity of the both asset and liability sides; c) If the interest rates go up by 1%, using the duration and convexity rule to determine the net worth of the bank and the equity to asset ratio;Required journal entries Total cash payment = 500000*10%*1/2 = $25, 000 Discount on bonds payable = (10240/64) *4 = $640 My question is the formula of the Total cash payment and Discount on bonds payable.
- Calculate net debt. Cash and cash equivalents Short term borrowings Long term borrowings Commercial paper (liability) Capital / finance lease Accounts receivable Total liabilities Inventory Select one: 2,108.0 2,103.0 2,025.0 14,132.0 3,176.0 419.0 2,883.0 331.0 1,651.0 83.0 17,308.0 5.0Assets Cash Investments ( 1 year) Total The bank's one-year repricing gap is (million) Multiple Choice O $425 $285 $74 $140 $66 Return 0.00% 4.00% 6.00% 6.75% Million $ $35 $ 200 $225 $ 250 $ 710 Liabilities and Equity Fixed-rate deposits Rate-sensitive deposits Fed fund borrowings Long-term borrowings at fixed rate: (maturity> 1 year) Equity Total Cost 3.50% 2.00% 2.50% 5.50% Millions $ $ 240 $260 $ 25 $119 $66 $ 710Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $15,500. If the issuing corporation redeems the bonds at 98 1/2, what is the amount of gain or loss on redemption? a. $500 loss Ob. $15,500 gain Oc. $500 gain Od. $15,500 loss 43 0 77777777777
- If the bonds payable account has a balance of $900,000 and the discount on bonds payable account has a balance of $72,000, what is the carrying amount of bonds? A. $828,000 B. $900,000 C. $972,000 D. $580,000Balance Sheet (dollars in thousands) and Duration (in years) Duration AmountT-bills. 0.5 $ 90T-notes 0.9 55T-bonds 4.393 176Loans 7 2,724Deposits. 1 2,092Fed. funds 0.01 238Equity 715What is the average duration of all the assets? What is the average duration of all the liabilities? What is the FI’s leverage-adjusted duration gap? What is the FI’s interest rate risk exposure? If the entire yield curve shifted upward 0.5 percent (i.e., ΔR/(1 + R) = 0.0050), what is the impact on the FI’s market value of equity? If the entire yield curve shifted downward 0.25 percent (i.e., ΔR/(1 + R) = −0.0025), what is the impact on the FI’s market value of equity?Drill 2 Write your answer in a bond paper or intermediate paper. Label it Drill NO. 2. Answer in number 1 is given already as your guide ASSETS LIABILITIES OWNER'S EQUITY 1 P25,000.00 #5,000.00 P20,000.00 2 P65,500.00 P59,070.00 3 P255,000.00 P75,000.00 P540,000.00 P9,020,000.00 5 P564,000.00 P466,000.00 6 P321,000.00 P87,000.00 P234,000.00 P964,780.00 P200,780.00 P87,000.00 P567,330.00 P94,500.00 P12,110.00 10 P644,990.00 P319,990.00 11 B443,200.00 P325,000.00