Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1. Followings are the information on expected inflows of principal and interest payment on assets and expected outflows of principal and interest payment on liabilities.
1. Followings are the information on expected inflows of principal and interest payment on assets and expected outflows of principal and interest payment on liabilities. Time Cash inflow Cash outflow 1 1,275,600 1,295,500 2 746,872 831,454 341,555 123,897 4 62,482 1,005 5 9,871 The discount rate applicable on cash flow is 4.25%. If the total assets and total liabilities are Rs. 20,000,000 and Rs. 18,000,000 respectively, calculate the leverage adjusted duration gap of the bank. Moreover, if the interest rate rise to 4.75%, what will be the change in the value of the net worth of the bank. 1. Followings are the information on expected inflows of principal and interest payment on assets and expected outflows of principal and interest payment on liabilities. Time Cash inflow Cash outflow 1 1,275,600 1,295,500 2 746,872 831,454 341,555 123,897 4 62,482 1,005 5 9,871 The discount rate applicable on cash flow is 4.25%. If the total assets and total liabilities are Rs. 20,000,000 and Rs. 18,000,000 respectively, calculate the leverage adjusted duration gap of the bank. Moreover, if the interest rate rise to 4.75%, what will be the change in the value of the net worth of the bank
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started