-
+1 - 312-224-1615
Get in touch with us
-
support@helpwithassignment.com
Send us an e-mail
Solution Library
Calculate The Duration Of Treasury Notes And Leverage Adjusted Duration Gap
Question
The numbers provided are in thousands of dollars.
|
Treasury bill |
$90 |
|
Time deposits |
$1,100 |
|
Treasury notes |
$55 |
|
Fed funds sold |
$ 230 |
|
Treasury bonds |
$176 |
|
Demand deposits |
$2,500 |
|
Loans |
$4,679 |
|
Equity |
$1,170 |
Notes: All Treasury bills have six months until maturity. One-year Treasury notes are priced at par and have a coupon of 7 percent paid semiannually. Treasury bonds have an average duration of 4.5 years and the loan portfolio has a duration of 7 years. Time deposits have a 1-year duration and the Fed funds duration is .003 years.
1. What is the duration of the bank's Treasury note portfolio?
a. 1.07 years.
b. 1.00 year.
c. 0.98 years.
d. 0.92 years.
e. Insufficient information.
2. What is the bank's leverage adjusted duration gap?
a. +6.73 years.
b. +0.29 years.
c. –6.44 years.
d. +6.51 years.
e. 0 years.
3. If all interest rates fall by 1 percent, calculate the impact on the bank's market value of equity using the duration approximation. (That is, DR/(1+R) = -1 percent)
a. The bank's market value of equity increases by $325,450.
b. The bank's market value of equity decreases by $325,450.
c. The bank's market value of equity increases by $336,500.
d. The bank's market value of equity decreases by $336,500.
e. There is no change in the bank's market value of equity.
Summary
These short questions belong to Finance and the questions deal with treasury notes of a bank. The duration of the treasury note portfolio, leverage adjusted duration gap and fall in interest and impact on the bank’s market value of equity needs to be calculated.
Total Word Count 139
Download Full SolutionWHAT OUR STUDENTS SAY
I often used to get baffled by the Theory X and Theory Y of management strategies when my friend told me to seek help from HwA. It was a great advice, I must say, because it helped me to get good grades and clear my concepts.
Laurie Butters Student
My main concern was the research that needed to be done for the human resources assignments for my undergraduate program. Keeping up with the course load and assignments from the other professors I was having a tough time. With TheReliableTutor, the tutors help out with the research saving my time and assisting me in submitting well researched and balanced assignments.
Gavin Rogers Student
I had taken the help from HwA to write the assignment on consumer protection laws in the UK. I needed to include a recent case study in the assignment essay and the commercial law assignment expert at HwA knew the best example to incorporate. I got an A in the assignment and that helped boost my grade for the entire term.
Dylan Kettleman Student
I was very badly stuck with my clinical research assignment where I needed to apply hypothesis testing. I was unsure about how this website will help me out but to my wonder I found out that these experts are all intensely equipped with all the knowledge and posses all the faculties to deal with the assignment. From then onwards I started taking advice and help from them on a regular basis and now reaping the benefits of the same
Ben Wilkinson Student
Operations management was my minor during my MBA but I faced much challenges with the problems and assignments. So once when I was stuck with my supply chain management assignment my friend Joan told me about this website. The feedback I got from them was very positive and the assignment was also very well done. All the calculations and the charts were displayed in proper manner and from then onwards I constantly took help from them.
Lisa Gracey Student
Comments
this is a very good website
I have 50 questions for the same test your page is showing only 28
hi can you please help or guide me to answer my assignments. thanks
hi can anyone help or guide me to my assignments. thanks
This solution is perfect ...thanks
Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes
Perfect bank of solution.
great !
thanks for the quick response. the solution looks good. :)
thnx for the answer. it was perfect. just the way i wanted it.
works fine.