Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ads It is given Bank XYZ having the following balance sheet: Assets (5 billion) Liab & Equity (5 billion) Cash 20 200 Deposits Long-term debt

image text in transcribed
Ads It is given Bank XYZ having the following balance sheet: Assets (5 billion) Liab & Equity (5 billion) Cash 20 200 Deposits Long-term debt MIS 40 10 160 Loans Fixed assets 10 20 Equity capital Total LEE Total assets 230 230 The bank manager estimates that the bank's Mac DA = 4 5 years and Mac D = 3.5 years. The bank would like to restrict its maximum equity exposure to $ 35 B and the current interest rate is 9% Based on all the above given information, the maximum increase in interest rate without going over the set equity exposure is O 1.174 O 127% O 1.47% O 167 O 1.84% if the market interest rate goes up only by 50% of your calculated value above the market value of the bank's total assets and total abilities will be 5202 Band 185B O $204 B and 205 B O5214 B and 206 B O $ 224 and 206 B 3 D O Type here to search Bi 11 Ads It is given Bank XYZ having the following balance sheet: Assets (5 billion) Liab & Equity (5 billion) Cash 20 200 Deposits Long-term debt MIS 40 10 160 Loans Fixed assets 10 20 Equity capital Total LEE Total assets 230 230 The bank manager estimates that the bank's Mac DA = 4 5 years and Mac D = 3.5 years. The bank would like to restrict its maximum equity exposure to $ 35 B and the current interest rate is 9% Based on all the above given information, the maximum increase in interest rate without going over the set equity exposure is O 1.174 O 127% O 1.47% O 167 O 1.84% if the market interest rate goes up only by 50% of your calculated value above the market value of the bank's total assets and total abilities will be 5202 Band 185B O $204 B and 205 B O5214 B and 206 B O $ 224 and 206 B 3 D O Type here to search Bi 11

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance Growth And Inequality

Authors: Louis-Philippe Rochon, Virginie Monvoisin

1st Edition

1788973682, 978-1788973687

More Books

Students also viewed these Finance questions