Needed to done by tomorrow evening 5pm.
Question 1: Term Structure of Interest Rates: Go to http:l'l'www.yieldcurve.com on the ieft hand side click on Yield Curves. This web site allows you to plot the yield curves for UK Gilts and US Treasuries for different periods. a) List the three facts about the term structure of interest rates b) Select a period and print a plot of an upward yield curve. Make comments using the theories you studied about the term structure of interest rates. G) Select another period and print a plot of an inverted yield curve and make comments using the theories you studied about the term structure of interest rates. d) Compare, generally, between the UK Gilt and the US treasury yield curves in 2. And 3 citing the power of prediction of the theories of term structure of interest rates in predicting the 2008/2009 nancial crisis. Question 2: Money and Banking Assignment The Ofce of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Government of Canada, established in 1987 to contribute to the safety and soundness of the Canadian financial system. OSFI supervises and regulates federally registered banks and insurers, trust and loan companies, as well as private pension plans subject to federal oversight. Go to OSFI website (https://www.os-bsif.gc.cafEng/Pages/default.aspx) - under Financial Institutions - select Financial Data select Bank. Populate the most recent consolidated balance sheet of the bank of your choice, and attach a printout. a) What is the total amount of loans held by the bank? Use \"total currency\". b) What is this number as a percentage of total bank assets? 0) Calculate the Equity Multiplier. (1) Would you buy the share of this bank as an investment? Explain Question 3: Bank AAA has $15 million of xed-rate assets, $30 million of rate-sensitive assets, $25 million of xedrate liabilities, $20 million of ratesensitive liabilities, 5 million of demand deposit, 10 million of securities, and 0.6 million of reserves. Assume that the required reserve is 10%. a) Reect the above information in a T account. How much is the Net worth? b) Calculate the required reserve and the excess reserve if any, c) Conduct a gap analysis for the bank, and show what will happen to bank income if interest rates rise by 5%? d) What would happen if the interest rates fall by 5%? e) What actions should the bank manager take if interest rates are expected to fall