32-36

32. A commercial bank has $200 million of floating-rate loans yielding the LIBOR + 2%. These loans are $200 million of mortgages with LIBOR +3%. The two financial have with the fixed-rate swap payment at Which of the following statement is correct about the interest rate swap? A) The commercial bank agrees to pay 9% and receive LINOR-1%. B) The savings association-agrees to pay 9% and receive LIBOR+1% C) The commercial is the buyer of the interest rate swap D) The savings association is the seller of the interest rate swap. financed by S200 million of fixed-rate deposits costing 9%. Asav ings association- with a fixed rate of 13%. They are financed by S200 milice of CDs al institutions have reached agreement on an interest rane swa 9% and the variable-rate swap payment at LIBOR-15 An FI has parchased a $220 million cap of S percent at a premium of 0.55 percent of face value. If interest rates rise to 9 percent, what are the net savings after deducting the premiumi? 33. A) $2,200,000 B) $990.000 C) so D) $1,210,000 E) -$2.200,000 34. Hedge Row Bank has the following balance sheet (in millions) Assets$320 Liabilities$288 32 $320 Equity Total $320 Total The duration of the assets is 5 years and the duration of the liabilities is 3 years. The bank is expecting interest rates to increase from 3 percent to 4 percent over the next year. What is the expected change in equity value (net worth) for Hedge Row Bank if the forecast is accurate? A) decrease by $7.15 million B) increase by $7.15 million C) increase by $6.46 million E) stay the same 35. If you can convert 150 Swiss francs to $90, the exchange rate is A) 167 S/sf B) 1,50 sos C) 0.90 S/stf D) 0.67 S/sf E) 1.67 sis 36. The exchange rate rose from 98.46W/S a year ago to 113.48WS today, A) the dollar has appreciated, and the yen has appreciated B) the dollar has depreciated, and the yen has depreciated C) the dollar has deprecated, and the yen has appreciated D) the dollar has appreciated, and the yen has depreciated