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1. With an initial deposit of CHS 101ml], and the current reserve requirement of 12% in Ghana [following the last MPC meeting]. illustrate how much

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1. With an initial deposit of CHS 101ml], and the current reserve requirement of 12% in Ghana [following the last MPC meeting]. illustrate how much additional money can be created with 1|] banks in the economy. [1|] marks] 2. Best National Bank reports interest-sensitive assets of Cl-IS ETC million and interest- sensitive liabilities of CHS 525 million during the coming month. Is the bank asset sensitive or liability sensitive? What is likely to happen to the bank's net interest margin if interest rates rise? and what if they fall? [4 marks] 3. Despite Savings Bank has a cumulative gap for the coming year of +GHS 135 million, and interest rates are expected to fall by two and a half percentage points. Can you calculate the expected change in net interest income that this thrift institution might experience? What change will occur in net interest income if interest rates rise by one and a quarter percentage points? [4 marks] 4. The Bank of Ghana issued a 3-year bond with a semi-annual coupon of 16.65%. The srva Bank purchased CH3 50 million of the bonds when the current yield of the bond was 15% on the market. a] Calculate the duration of the bond. [ED marks] b} An analyst with The EWA Bank forecasts that the interest rate will rise by D.5% next month. What is the percentage change in the price of the bond? [3 marks] c] What is the cedi change in the price of the bond? Calculate the new price of the bond on the market [2 marks] 5. Suppose that EYE Bank's balance sheet is: Asset [million cedi s] Liabilities [million cedis] ... Assume that the duration of the asset is 5 years and that of the liability is 3 years. The bank expects interest rate to rise by 1% from the current level of 1D%. a] Calculate the potential loss on the bank' s net worth. b] Prepare the bank's balance sheet after the rate change

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