Urgent
A Ghanaian bank has assets of GHS100 million and average duration of the assets of 2.7 years. The bank has liabilities of GHS95million and average duration of the liabilities of 1.03 years. If interest rate should increase from 10% to 15%, calculate the change in the (a) market value of assets (b) the market value of the liabilities (c) net worth of the bank
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Banking Management
A bank has an average asset duration of 6 years and an average liability duration of 2 years. This bank has total assets of $ 457 million and total liabilities of $347 million. Currently, market interest rates are 10 percent. If interest rate falls by 2 percent, this bank's change in net worth is $______________ million.
Hedge Row Bank has the following balance sheet (in millions): Assets $135 $150 Liabilities Equity $150...
Hedge Row Bank has the following balance sheet (in millions): Assets $135 $150 Liabilities Equity $150 Total 15 Total Sise The duration of the assets is 6 years and the duration of the liabilities is 4 years. The bank is expecting interest rates to fall from 10 percent to 9 percent over the next year. a. What is the duration gap for Hedge Row Bank? (Round your answer to 1 decimal place. (e.g.. 32.1)) b. What is the expected change...
3. Hedge Row Bank has the following balance sheet (in millions): $ 189 $210 Liabilities Assets...
3.
Hedge Row Bank has the following balance sheet (in millions): $ 189 $210 Liabilities Assets Equity 21 $ 210 $210 Total Total The duration of the assets is 7 years and the duration of the liabilities is 5 years. The bank is expecting interest rates to fall from 10 percent to 9 percent over the next year. a. What is the duration gap for Hedge Row Bank? (Round your answer to 2 decimal places. (e.g., 32.16)) b. What is...
Hedge Row Bank has the following balance sheet (in millions Assets $150 Liabilities _Equity $150 Total...
Hedge Row Bank has the following balance sheet (in millions Assets $150 Liabilities _Equity $150 Total Total The duration of the assets is 6 years and the duration of the liabilities is 4 years. The bank is expecting interest rates to fall from 10 percent to 9 percent over the next year. a. What is the duration gap for Hedge Row Bank? (Round your answer to 1 decimal place. (e.g. 32.1)) b. What is the expected change in net worth...
You currently have pension fund assets of $15 million in a bond portfolio with a Macaulay...
You currently have pension fund assets of $15 million in a bond portfolio with a Macaulay duration of 10. Your liabilities are $2.7 million per year starting 30 years from today (i.e. at time 30) and lasting for 30 years (i.e. the last payment is at time 60). The yield curve is flat with spot rates constant at 4% for all maturities. (a) Compute the present value of your liabilities. Do you have enough assets to cover those liabilities? (b)...
Please answer the following questions. I put -9.20%, but it says it's wrong. Suppose First National...
Please answer the following questions.
I put -9.20%, but it says it's wrong.
Suppose First National Bank holds $100 million in assets with an average duration of 4 years, and it holds $85 million in liabilities with an average duration of 2 years Further suppose there is a 4-percentage-point increase in interest rates. Calculate the percentage decrease in First National Bank's net worth relative to the total original asset value A 4 percentage point increase in interest rates decreases First...
Hedge Row Bank has the following balance sheet (in millions): Assets: 160 Liab: 128 &n
Hedge Row Bank has the following balance sheet (in millions): Assets: 160 Liab: 128 Equity: 32 Total: 160 160 The duration of the assets is 6 years and the duration of the liabilities is 4.5 years. The bank is expecting interest rates to fall from 11 percent to 10 percent over the next year. a. What is the duration gap for Hedge Row Bank? (Round your answer to 2 decimal places. (e.g., 32.16)) b. What is the expected change...
Market Value Market Value Duration (Years) Assets Rate Rate Liabilities Duration and (Years) Equity Time Deposits...
Market Value Market Value Duration (Years) Assets Rate Rate Liabilities Duration and (Years) Equity Time Deposits 2.50 CDs 5.00 Equity 4% 6% 1.25 3.00 Cash Loans T-Bonds Total $ $ $ $ 150 675 175 1,000 10% 5% $ $ $ 500 400 100 1,000 Use the following bank information for questions a) – e). a) What is the weighted average duration of assets? b) What is the bank's duration gap? c) What is the bank's weighted average cost of...
Show work (40 Points) As the new management trainee at the Rossville Bank of Tennessee, you...
Show
work
(40 Points) As the new management trainee at the Rossville Bank of Tennessee, you are given balance sheet, you have been asked by the bank president to determine the current mark-to-market balance sheet and modified durations for the bank's assets and liabilities. Fill in the blanks with market values and modified durations. Some of this information is already filled in. The bank has only three types of assets and two types of deposits. Amounts are in S thousands...
Q1) Two banks are being examined by regulators to determine the interest rate sensitivity of their...
Q1) Two banks are being examined by regulators to determine the interest rate sensitivity of their balance sheets. Bank A has assets composed solely of a 10-year $1 million loan with a coupon rate and yield of 12 percent. The loan is financed with a 10-year $1 million CD with a coupon rate and yield of 10 percent. Bank B has assets composed solely of a 7-year, 12 percent zero-coupon bond with a current (market) value of $894,006.20 $1,976,362.88. The...
Hedge Row Bank has the following balance sheet (in millions): Assets $135 $150 Liabilities Equity $150 Total 15 Total Sise The duration of the assets is 6 years and the duration of the liabilities is 4 years. The bank is expecting interest rates to fall from 10 percent to 9 percent over the next year. a. What is the duration gap for Hedge Row Bank? (Round your answer to 1 decimal place. (e.g.. 32.1)) b. What is the expected change...
3.
Hedge Row Bank has the following balance sheet (in millions): $ 189 $210 Liabilities Assets Equity 21 $ 210 $210 Total Total The duration of the assets is 7 years and the duration of the liabilities is 5 years. The bank is expecting interest rates to fall from 10 percent to 9 percent over the next year. a. What is the duration gap for Hedge Row Bank? (Round your answer to 2 decimal places. (e.g., 32.16)) b. What is...
Hedge Row Bank has the following balance sheet (in millions Assets $150 Liabilities _Equity $150 Total Total The duration of the assets is 6 years and the duration of the liabilities is 4 years. The bank is expecting interest rates to fall from 10 percent to 9 percent over the next year. a. What is the duration gap for Hedge Row Bank? (Round your answer to 1 decimal place. (e.g. 32.1)) b. What is the expected change in net worth...
Please answer the following questions.
I put -9.20%, but it says it's wrong.
Suppose First National Bank holds $100 million in assets with an average duration of 4 years, and it holds $85 million in liabilities with an average duration of 2 years Further suppose there is a 4-percentage-point increase in interest rates. Calculate the percentage decrease in First National Bank's net worth relative to the total original asset value A 4 percentage point increase in interest rates decreases First...
Market Value Market Value Duration (Years) Assets Rate Rate Liabilities Duration and (Years) Equity Time Deposits 2.50 CDs 5.00 Equity 4% 6% 1.25 3.00 Cash Loans T-Bonds Total $ $ $ $ 150 675 175 1,000 10% 5% $ $ $ 500 400 100 1,000 Use the following bank information for questions a) – e). a) What is the weighted average duration of assets? b) What is the bank's duration gap? c) What is the bank's weighted average cost of...
Show
work
(40 Points) As the new management trainee at the Rossville Bank of Tennessee, you are given balance sheet, you have been asked by the bank president to determine the current mark-to-market balance sheet and modified durations for the bank's assets and liabilities. Fill in the blanks with market values and modified durations. Some of this information is already filled in. The bank has only three types of assets and two types of deposits. Amounts are in S thousands...
Q1) Two banks are being examined by regulators to determine the interest rate sensitivity of their balance sheets. Bank A has assets composed solely of a 10-year $1 million loan with a coupon rate and yield of 12 percent. The loan is financed with a 10-year $1 million CD with a coupon rate and yield of 10 percent. Bank B has assets composed solely of a 7-year, 12 percent zero-coupon bond with a current (market) value of $894,006.20 $1,976,362.88. The...
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