-
+1 - 312-224-1615
Get in touch with us
-
support@helpwithassignment.com
Send us an e-mail
Solution Library
Calculation Of Change In Assets, Liabilities And Equity of Bank On Change In Interest Rates
Question
All assets and liabilities are currently priced at par and pay interest annually.
|
Assets |
Amount ($ millions) |
Annual Rate |
Liabilities |
Amount ($ millions) |
Annual Rate |
|
2-year loans |
$40 |
8 % |
5-year term deposit |
$30 |
6 % |
|
3-year loans |
$60 |
8 % |
3-year CD |
$60 |
7 % |
|
|
|
|
Equity |
$10 |
|
|
Total |
$100 |
|
Total |
$100 |
|
1. What is the change in the value of its assets if all interest rates decrease by 1 percent?
a. Approximately $1.61 million.
b. Approximately $2.29 million.
c. Approximately $1.93 million.
d. Approximately $2.20 million.
e. Approximately $2.52 million.
2. What is the change in the value of its liabilities if all interest rates decrease by 1 percent?
a. Approximately $2.0 million.
b. Approximately $2.3 million.
c. Approximately $2.6 million.
d. Approximately $2.9 million.
e. Approximately $3.2 million.
3. What is the effect on the value of the FI’s equity if interest rates decrease by 1 percent?
a. Gain of $0.6968 million.
b. Gain of $0.30 million.
c. Loss of $1.6212 million.
d. No change in equity.
e. Loss of $0.6048 million.
4. What should be the rate on the two-year loan in order for the value of the equity to remain at $10 million? Assume the interest rates for all other instruments decreased by 1 percent.
a. 5.50 percent.
b. 6.19 percent.
c. 4.15 percent.
d. 6.54 percent.
e. 7.25 percent.
Summary
This question belongs to Finance and it is about calculation of change in the value of assets and liabilities if interest rates decrease and effect of value of bank’s equity if interest rates decrease. These have been answered in the solution with calculations.
Total Word Count 237
Download Full SolutionWHAT OUR STUDENTS SAY
The quality of the research work and the structuring of the assignment essay was almost exactly as what our professor had asked for. The assignment expert at HwA was extremely professional with maintaining the deadline and sticking to the guidelines stipulated. Overall my experience with them has been way above satisfactory and I would recommend them to all students wanting help in writing their instrumentation engineering assignment.
Barbara Hooper Student
There are things I failed to get a grasp on in my classes and for that reasons assignments often looked much more challenging for me. However, luckily I came across HwA and from my BSc N course till the final year of my MSc N course I always take their help and get good results.
Jacob Tremblay Student
Most of my classmates where very relaxed when it was time to deliver our Research Proposal. They don’t perceive it to be important to invest time in selecting the topic. The Research Proposal writer at HwA helped me to understand the importance of choosing simpler and doable topics rather than creating challenges later during the time of conducting the research. Needless to say that I was the only one in the class to get A+ in the Research Proposal and A in the actual Research Paper.
Zhi Jie Student
I came to know about TheReliableTutor from my senior from my university as she mentioned that how she got help from the Australia based nursing assignment help experts from here. My experience with them is equally good and I will continue taking help as I plan on getting higher degrees in nursing.
Alistair Taylor Student
When I was pursuing my course in Enterprise Resource Planning in supply chain management, I constantly took help from HwA and got instant result. The ERP expert here in HwA is very helpful and has helped me to complete the course with distinction.
Andrew Oliver 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.