For Question 2-5 Rate sensitive Fix rate Not earning Assets 1000 2000 1000 Yield 5% 7%...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
For Question 2-5 Rate sensitive Fix rate Not earning Assets 1000 2000 1000 Yield 5% 7% Total 4000 2. Find out Net Interest Income, Net Interest Margin, and GAP? Liability 800 1800 2600 Cost Shareholder Equity 1400 4000 2% 6% If yield curve moves parallel and interest rate increase by 2 percent, what happens to net interest income, net interest margins and GAP (decrease or increase by how much for each)? Why? if Interest rate for assets increases by I percent and spread decrease by 1 percent, what happens to net interest income, net interest margins and GAP? (decrease or increase by how much for each) Why? Interest rate for assets increases by 3 percent, spread decrease by 1 percent, and rate sensitive assets and rate sensitive liability together increase by 100% what happens to net interest income, net interest margins and GAP? (decrees or increase by how much for each) Why? For Question 2-5 Rate sensitive Fix rate Not earning Assets 1000 2000 1000 Yield 5% 7% Total 4000 2. Find out Net Interest Income, Net Interest Margin, and GAP? Liability 800 1800 2600 Cost Shareholder Equity 1400 4000 2% 6% If yield curve moves parallel and interest rate increase by 2 percent, what happens to net interest income, net interest margins and GAP (decrease or increase by how much for each)? Why? if Interest rate for assets increases by I percent and spread decrease by 1 percent, what happens to net interest income, net interest margins and GAP? (decrease or increase by how much for each) Why? Interest rate for assets increases by 3 percent, spread decrease by 1 percent, and rate sensitive assets and rate sensitive liability together increase by 100% what happens to net interest income, net interest margins and GAP? (decrees or increase by how much for each) Why?
Expert Answer:
Answer rating: 100% (QA)
SOLUTION Question 2 2 Find out Net Interest Income Net Interest Margin and GAP To find the net interest income we need to subtract the interest expense on liabilities from the interest income on asset... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these finance questions
-
Do you think that viewing a marriage proposal as a negotiation is a good idea or not? Support your response by providing likely outcomes. Using the material from the chapter, can you build a case to...
-
5. (a) Derive the transfer function of an open end line, Q/P(s), and find the expressions for its parameters. (b) A hydraulic line whose end is open to the atmosphere has the following parameters:...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
The Shannon Township Debt Service Fund accumulates resources to pay its $2 million general obligation debt. The debt is payable in equal annual installments of principal over 10 years with 5%...
-
(a) For n = 3 let X3 = {1, 2, 3}. Now consider the sum where pA denotes the product of all elements in a nonempty subset A of X3. Note that the sum is taken over all the nonempty subsets of X3....
-
Review the charts below to calculate the price of the franc in terms of the Japanese Yen. 130.88 121.69 142.75 EE Click to open/close charts. JPY CHF About Us Privacy Policy Terms of Service LP
-
Investment professionals frequently develop concerns that earnings management may be present when they observe that a firm has voluntarily changed its inventory valuation policy from LIFO to FIFO....
-
On January 1, 2011, Peres Company purchases 80% of the common stock of Soap Company for $308,000. On this date, Soap has common stock, other paid-in capital in excess of par, and retained earnings of...
-
In capital budgeting If royalty is paid on revenue than its a payment however if there is no revenue that year than is it a credit. Royalty is a taxable expense - what effect does this have on tax...
-
This is a new manufacturing corporation that issued $50000 common stock for cash on the first day. All overhead expenses are paid immediately by cash. To make it easy, there are no other operating...
-
Read the following paragraphs about four films and then identify the purpose of each paragraph. 1. This film could easily have been cut down to less than two hours. By the final scene, I noticed that...
-
an eye-catching and persuasive academic poster. This poster will be used to support the digital marketing pitch contained in the web site and social media posts. Your design should effectively...
-
A motor manufacturer (ticker RPM) currently pays out 40% of their annual net income, retaining the rest for further investments in new opportunities. The estimated return on equity (ROE) of these new...
-
Leslie Sporting Goods is a locally owned store that specializes in printing team jerseys. The majority of its business comes from orders for various local teams and organizations. While Leslie's...
-
Economic growth has been lackluster for more than a decade now. This has occurred at a time when economies have faced much unfolding change. What are the forces of change, how are they affecting the...
-
Delia Company, a multinational company, on January 1, this year, issued a 12% coupon interest rate, 10-year bond with a $1,000 par value that pays interest annually. Investors who buy this bond...
-
What is Health Economics? Summarize what is health economics, demonstrating the main issues and how it departs from standard microeconomics. Discuss 3 main issues, taken from the following list:...
-
Which of the following is NOT a magnetic dipole when viewed from far away? a) A permanent bar magnet. b) Several circular loops of wire closely stacked together with the same current running in each...
-
During 2012, Tom sold Sears stock for $10,000. The stock was purchased 4 years ago for $13,000. Tom also sold Ford Motor Company bonds for $35,000. The bonds were purchased 2 months ago for $30,000....
-
Bea Jones (age 32) moved from Texas to Florida in December 2011. She lives at 654 Ocean Way, Gulfport, FL 33707. Bea's Social Security number is 466-78-7359 and she is single. Her earnings and income...
-
Mary paid $2,000 of state income taxes in 2012. The total sales tax she paid during 2012 was $5,500, which included $3,000 for the cost of a new car. How should Mary treat the taxes paid on her 2012...
-
Which of the symbolic representations in Figure 2-24 indicates that a sales invoice has been filed? Figure 2.24 [a] [b] [c] [p]
-
During the review of an internal control system an auditor may review decision tables prepared by the client. A decision table is usually prepared by a client to supplement or replace the preparation...
-
Group dynamics affect the culture of the board. What do you think are the key elements to take into account when a new member arrives?
Study smarter with the SolutionInn App