In the following balance sheet, estimate the impact on the economic value of equity (EVE). If interest rates of assets fall by 1% and deposit rates increase by 1%. EVE=$( ) Loan A (8%, 3 year) = $150 Deposit A (5%, 2 years) =$250 Loan B (11%, 4 years) = $200 Deposit B (7%, 3 year) = $100 Total Assets = $350 Total Liabilities = $350 16.44 17.44 18.44 19.44
In the following balance sheet, estimate the impact on the economic value of equity (EVE). If interest rates of assets fall by 1% and deposit rates increase by 1%. EVE=$( ) Loan A (8%, 3 year) = $150 Deposit A (5%, 2 years) =$250 Loan B (11%, 4 years) = $200 Deposit B (7%, 3 year) = $100 Total Assets = $350 Total Liabilities = $350 16.44 17.44 18.44 19.44
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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In the following balance sheet, estimate the impact on the economic value of equity (EVE).
If interest rates of assets fall by 1% and deposit rates increase by 1%. EVE=$( )
Loan A
(8%, 3 year)
= $150
Deposit A
(5%, 2 years)
=$250
Loan B
(11%, 4 years)
= $200
Deposit B
(7%, 3 year)
= $100
Total Assets
= $350
Total Liabilities
= $350
16.44
17.44
18.44
19.44
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