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a. Take the following balance sheet, which of the assets and labilities are rate-sensitive? Which assets and liabilities are not? Assets Amount (mil.) Liabilities Amount
a. Take the following balance sheet, which of the assets and labilities are rate-sensitive? Which assets and liabilities are not? Assets Amount (mil.) Liabilities Amount (mil.) Long-Term Loans 75 Checkable Deposits 40 Long-Term Securities 26 Savings Deposits 100 Reserves 54 Money Market 10 Accounts Short-Term Securities 15 Variable Rate CDs 25 Variable-Rate Loans 30 Long-Term CDs 25 b. What is the estimated rate of change of bank profit, in terms of next year's interest rate, conditional on this year's interest rate being 2%? c. Suppose that all the long-term securities that the bank holds mature in 4 years and their interest rate will be 5% in that year. What is the approximate market value of these long-term securities in 4 years? a. Take the following balance sheet, which of the assets and labilities are rate-sensitive? Which assets and liabilities are not? Assets Amount (mil.) Liabilities Amount (mil.) Long-Term Loans 75 Checkable Deposits 40 Long-Term Securities 26 Savings Deposits 100 Reserves 54 Money Market 10 Accounts Short-Term Securities 15 Variable Rate CDs 25 Variable-Rate Loans 30 Long-Term CDs 25 b. What is the estimated rate of change of bank profit, in terms of next year's interest rate, conditional on this year's interest rate being 2%? c. Suppose that all the long-term securities that the bank holds mature in 4 years and their interest rate will be 5% in that year. What is the approximate market value of these long-term securities in 4 years
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