A financial Institution has the following market value balance sheet structure: Assets Liabilities and Equity Cash $ 2,180 Certificate of deposit Bond 18,500 Equity Total assets $ 12,600 Total liabilities and equity $ 11,180 1,500 $ 12,600 8. The bond has a 10-year maturity, a fixed-rate coupon of 11 percent paid at the end of each year, and a par value of $10,500. The certificate of deposit has a 1-year maturity and a 6 percent fixed rate of interest. The Fl expects no additional asset growth. What will be the net interest Income (Nl) at the end of the first year? (Note Net interest income equals interest income minus interest expense.) b. If at the end of year 1 market interest rates have increased 100 basis points (1 percent), what will be the net interest income for the second year? Is the change in Nll caused by reinvestment risk or refinancing risk? C. Assuming that market interest rates increase 1 percent, the bond will have a value of $9,941 at the end of year 1. What will be the market value of the equity for the Fl? Assume that all of the Nil in part(a) is used to cover operating expenses or is distributed as dividends d. It market interest rates had decreased 100 basis points by the end of year 1. would the market value of equity be higher or lower than $1,500? e. What factor has caused the changes in operating performance and market value for this Fi? Complete this question by entering your answers in the tabs below. Required A Required B Required Required D Required E The bond has a 10-year maturity, a fixed-rate coupon of 11 percent paid at the end of each year, and a par value of $10,500. The certificate of deposit has a 1-year maturity and a 6 percent fixed rate of interest. The FI expects no additional asset growth. What will be the net interest income (NII) at the end of the first year? (Note: Net interest income equals interest Income minus interest expense) Not interest income (NI) A financial institution has the following market value balance sheet structure: Assets Liabilities and Equity Cash $ 2,100 Certificate of deposit Bond 10,500 Equity Total assets $ 12,600 Total liabilities and equity $ 11,100 1,500 $ 12,600 a. The bond has a 10-year maturity, a fixed-rate coupon of 11 percent paid at the end of each year, and a par value of $10 certificate of deposit has a 1-year maturity and a 6 percent fixed rate of interest. The FI expects no additional asset grow be the net interest Income (NII) at the end of the first year? (Note: Net Interest Income equals Interest income minus inte b. If at the end of year 1 market interest rates have increased 100 basis points (1 percent), what will be the net Interest in second year? Is the change in Nll caused by reinvestment risk or refinancing risk? C. Assuming that market interest rates increase 1 percent, the bond will have a value of $9,941 at the end of year 1. What market value of the equity for the FIP Assume that all of the Nil in part (a) is used to cover operating expenses or is distrit dividends. d. If market Interest rates had decreased 100 basis points by the end of year 1, would the market value of equity be highe than $1,500? e. What factor has caused the changes in operating performance and market value for this Fl? Complete this question by entering your answers in the tabs below. Required Required B Required Required D Required E If at the end of year 1 market interest rates have increased 100 basis points (1 percent), what will be the net interest income for the second year? Is the change in NII caused by reinvestment risk or refinancing risk? Net interest income (NIT) Is the change in Nll caused by Assets A financial institution has the following market value balance sheet structure: Liabilities and Equity Cash $ 2,100 Certificate of deposit 5. 11,100 Bond 10.500 Equity 1.500 Total assets $ 12,680 Total liabilities and equity $ 12,600 a. The bond has a 10-year maturity, a fixed-rate coupon of 11 percent paid at the end of each year, and a par value of $10,500. The certificate of deposit has a 1-year maturity and a 6 percent fixed rate of Interest The Fl expects no additional asset growth. What will be the net interest income (Nil) at the end of the first year? (Note Net interest income equals Interest income minus interest expense) b. If at the end of year 1 market interest rates have increased 100 basis points (1 percent). what will be the net interest Income for the second year? Is the change in Nll caused by reinvestment risk or refinancing risk? c. Assuming that market interest rates increase 1 percent , the bond will have a value of $9.941 at the end of year 1 What will be the market value of the equity for the Fi? Assume that all of the Nil in part (a) is used to cover operating expenses or es distributed as dividends d. If market interest rates had decreased 100 basis points by the end of year 1, would the market value of equity be higher or lower than $1,5002 e. What factor has caused the changes in operating performance and market value for this Fi? cs Complete this question by entering your answers in the tabs below. Required A Required Required CN Required Required E Assuming that market interest rates increase 1 percent, the bond will have a value of $9,941 at the end of year 1. What will be the market value of the equity for the Fl? Assume that all of the Nil in part() is used to cover operating expenses or is distributed as dividends Market value of the equity for the Assets A financial Institution has the following market value balance sheet structure Liabilities and Equity Cash $ 2,100 Certificate of deposit $ 11,180 Bond 10.500 Equity 1,500 Total assets $ 12,689 Total liabilities and equity $ 12,600 a. The bond has a 10-year maturity, a fixed-rate coupon of 11 percent paid at the end of each year, and a par value of $10,500,T certificate of deposit has a 1-year maturity and a 6 percent fixed rate of interest. The Fl expects no additional asset growth. Wha be the net interest income (Nil) at the end of the first year? (Note Net interest income equals Interest Income minus interest exp b. If at the end of year 1 market interest rates have increased 100 basis points (1 percent), what will be the net interest income fol second year? Is the change in Nil caused by reinvestment risk or refinancing nisk? c. Assuming that market interest rates increase 1 percent, the bond will have a value of $9,941 at the end of year 1. What will be market value of the equity for the Fl? Assume that all of the Nil in part (a) is used to cover operating expenses or is distributed as dividends d. If market interest rates had decreased 100 basis points by the end of year I would the market value of equity be higher or low than $1,500? e. What factor has caused the changes in operating performance and market value for this Fil? Complete this question by entering your answers in the tabs below. Required Required B Required Required D Required E If market interest rates had decreased 100 basis habits by the end of year 1, would the market value of equity be higher or lower than $1,500 (Negative amounts should be indicated by a minus sign.) because the value of the bond assots) would be The market value of the equity would be and the value of the CD would A financial institution has the following market value balance sheet structure: Assets Liabilities and Equity Cash $ 2,100 Certificate of deposit $ 11,100 Bond 19,500 Equity 1,500 Total assets $ 12,600 Total Habilities and equity $ 12,600 o. The bond has a 10-year maturity, a fixed-rate coupon of 11 percent paid at the end of each year, and a par value of $10,500. The certificate of deposit has a 1-year maturity and a 6 percent fixed rate of interest. The Fl expects no additional asset growth. What will be the net interest Income (Nll ) at the end of the first year? (Note Net Interest income equals interest income minus interest expense) b. If at the end of year 1 market interest rates have increased 100 basis points (1 percent), what will be the net interest income for the second year? is the change in NII caused by reinvestment risk or refinancing risk? C. Assuming that market interest rates increase 1 percent, the bond will have a value of 59,941 at the end of year 1. What will be the market value of the equity for the Fi? Assume that all of the Nil in part (a) is used to cover operating expenses or is distributed as dividends d. It market interest rates had decreased 100 basis points by the end of year 1, would the market value of equilty be higher or lower than $1,500? e. What factor has caused the changes in operating performance and market value for this FR ce Complete this question by entering your answers in the tabs below. Required A Required Required Required Required E What factor has caused the changes in operating performance and market value for this FI? Factor that caused the changes in operating performance and market value for this Fl