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Bank x plans to use two investments it has to obtain discount window loan: it has 100 million 6 month T-bills and 100 million BBB
Bank x plans to use two investments it has to obtain discount window loan: it has 100 million 6 month T-bills and 100 million BBB rated - 2 year bond (hint: you need to figure out what the duartion for each of the assets to use correct %), the max amount it can borrow from central bank is ______ million
duration 0-1 duration>1-3 duration >3-5 Treasury Bills, 99% 99% 98% Notes, Bonds, Floating Rate Notes, AAA-A rated- 98% 98% 97% Bonds BBB rated - 91% 90% 87% Bonds Bank x plans to use two investments it has to obtain discount window loan: it has 100 million 6 month T-bills and 100 million BBB rated - 2 year bond (hint: you need to figure out what the duartion for each of the assets to use correct %), the max amount it can borrow from central bank is million Numeric ResponseStep by Step Solution
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