good morning, i will be glad if you can help me with these final exam review questions.

regards

1 - Dutch Auction': Palantir, a privately held company, is contemplating going public either through the traditional method using investment bankers or selling shares using the Dutch Auction Method used by Google. What are the costs and benefits of both methods and as a financial consultant what would you advise them? Why? What other relevant issues should you consider when going public? Whys is Tesla trying to go Private? 2 - A. Interest Rate Swaps: Explain using an example, "Interest Rate Swaps [IRS]? How are these used by corporations & banks to hedge risks? Are Swaps optimal for risk transfer for banks & local governments? Why or Why not? B. An Insurance company owns $50 million of floating- rate bonds yielding LIBOR plus 1 percent. These loans are financed with $50 million of fixed rate guaranteed investment contracts (GICs) costing 10%. A Finance company has $50 million in auto loans with a fixed rate of 14%. These loans are financed with $50 million in CDs at a variable rate of LIBOR plus 4%. What is the risk exposure of the Insurance Company? What is the risk exposure of the Finance Company? . What would be the cash flows of each company if they enter into a SWAP? 3 - Bank Duration GAP: State Bank's balance sheet is listed below. Market yields and durations (in years) are in parenthesis, and amounts are in millions. Calculate Impact on Bank Capital: Macro Approach Assets Liabilities and Equity Cash $20 Demand Deposits $250 Fed Funds (5.05% 0.02) 150 MMDAs (4.5%, 0.50) T-bills (5.25% 0.22) 300 no minimum balance requirement 360 T-bonds 7.50%, 7.55) 200 CDs (4.3%, 0.48) 715 Consumer loans (6%, 2.50) 900 CDs(6%, 4.45) 1,105 C&I loans (5.8%, 6.58) 475 Fed Fund (5%, 0.02) 515 Fixed-rate mortgages (7.85, 19.50 1200 Commercial paper (5.05%. 0.45) 400 Subordinated debt: Variable-rate mortgages repriced @ quarter (6.3%, 0.25) 580 Fixed-rate (7.25%, 6.65) 200 Premises and equipment 120 Total Liabilities $3,545 400 Equity Total Liabilities and equity Total assets $3.945 $3,945 a. What is State's Bank's duration gap? b. Use these duration values to calculate the expected changed in the value of the assets and liabilities of State Bank for the predicted increase of 0.5 percent in interest rates. c. What is the change in equity value forecasted from the duration values for the predicted decrease in interest rates of 0.25 percent? +- Risk-Adjusted Performance Metrics for a Project - Basle 2.0 Framework: Loan Evaluation - MICRO APPROACH Calculate: 1. The Expected Loss, 2. Total Revenue, 3. Risk Adjusted Revenue, 4. Economic Revenue and 5. Economic Profit for this Bank proposal? Assumptions: regarding a single counterparty who is a global car manufacturer; Basle II Framework. The counterparty rating: is rated 5A by the bank's internal rating model and credit committee. This translates into a Probability of Default of [PD]=0.22% Product type: Syndication. The bank expects to earn a margin of 0.575% (57.5 Basis points) on this loan, plus a one-time fee of $589,273. Location: The booking location is England, but the loan is to be issued to the Netherlands (in Euros) with a tenor of 1 year The Amount: The drawn amount would equal the limit, which is requested to be $147,318,182 The Exposure: The bank's model indicates the Loss Given Default for this transaction would be 60.86% of exposure. Capital Charge: The treasury assesses a Capital Charge of $382,631 Other Charges: Group Finance provides the following overhead allocations to the transaction. Total Costs Allocated: $143,353; Tax = $217,114 b. What other considerations should dictate whether this loan should be made? 1 - Dutch Auction': Palantir, a privately held company, is contemplating going public either through the traditional method using investment bankers or selling shares using the Dutch Auction Method used by Google. What are the costs and benefits of both methods and as a financial consultant what would you advise them? Why? What other relevant issues should you consider when going public? Whys is Tesla trying to go Private? 2 - A. Interest Rate Swaps: Explain using an example, "Interest Rate Swaps [IRS]? How are these used by corporations & banks to hedge risks? Are Swaps optimal for risk transfer for banks & local governments? Why or Why not? B. An Insurance company owns $50 million of floating- rate bonds yielding LIBOR plus 1 percent. These loans are financed with $50 million of fixed rate guaranteed investment contracts (GICs) costing 10%. A Finance company has $50 million in auto loans with a fixed rate of 14%. These loans are financed with $50 million in CDs at a variable rate of LIBOR plus 4%. What is the risk exposure of the Insurance Company? What is the risk exposure of the Finance Company? . What would be the cash flows of each company if they enter into a SWAP? 3 - Bank Duration GAP: State Bank's balance sheet is listed below. Market yields and durations (in years) are in parenthesis, and amounts are in millions. Calculate Impact on Bank Capital: Macro Approach Assets Liabilities and Equity Cash $20 Demand Deposits $250 Fed Funds (5.05% 0.02) 150 MMDAs (4.5%, 0.50) T-bills (5.25% 0.22) 300 no minimum balance requirement 360 T-bonds 7.50%, 7.55) 200 CDs (4.3%, 0.48) 715 Consumer loans (6%, 2.50) 900 CDs(6%, 4.45) 1,105 C&I loans (5.8%, 6.58) 475 Fed Fund (5%, 0.02) 515 Fixed-rate mortgages (7.85, 19.50 1200 Commercial paper (5.05%. 0.45) 400 Subordinated debt: Variable-rate mortgages repriced @ quarter (6.3%, 0.25) 580 Fixed-rate (7.25%, 6.65) 200 Premises and equipment 120 Total Liabilities $3,545 400 Equity Total Liabilities and equity Total assets $3.945 $3,945 a. What is State's Bank's duration gap? b. Use these duration values to calculate the expected changed in the value of the assets and liabilities of State Bank for the predicted increase of 0.5 percent in interest rates. c. What is the change in equity value forecasted from the duration values for the predicted decrease in interest rates of 0.25 percent? +- Risk-Adjusted Performance Metrics for a Project - Basle 2.0 Framework: Loan Evaluation - MICRO APPROACH Calculate: 1. The Expected Loss, 2. Total Revenue, 3. Risk Adjusted Revenue, 4. Economic Revenue and 5. Economic Profit for this Bank proposal? Assumptions: regarding a single counterparty who is a global car manufacturer; Basle II Framework. The counterparty rating: is rated 5A by the bank's internal rating model and credit committee. This translates into a Probability of Default of [PD]=0.22% Product type: Syndication. The bank expects to earn a margin of 0.575% (57.5 Basis points) on this loan, plus a one-time fee of $589,273. Location: The booking location is England, but the loan is to be issued to the Netherlands (in Euros) with a tenor of 1 year The Amount: The drawn amount would equal the limit, which is requested to be $147,318,182 The Exposure: The bank's model indicates the Loss Given Default for this transaction would be 60.86% of exposure. Capital Charge: The treasury assesses a Capital Charge of $382,631 Other Charges: Group Finance provides the following overhead allocations to the transaction. Total Costs Allocated: $143,353; Tax = $217,114 b. What other considerations should dictate whether this loan should be made