Question
Terp Bank has $400M in total assets and $300M in deposits while Smith Bank has $2B in assets and $2.5B in deposits Both banks are
Terp Bank has $400M in total assets and $300M in deposits while Smith Bank has $2B in assets and $2.5B in deposits Both banks are charged the same deposit insurance premium of $.25/$100 of deposits
a/ Produce a clearly labeled graph that shows for each bank whether the bank is in the money to exercise the option it has
b/ What kind of option is this?
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
