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The current price of a deliverable T-bond is 103-08 per $100 of face value, its duration is nine years, and its yield to maturity is 7.68 percent.
If the finance company is going to be the swap buyer and the insurance company the swap seller, what is an example of a feasible swap?
In the 1980s, many thrifts that failed had made loans to oil companies located in Louisiana, Texas, and Oklahoma.
Bank 1, with $130 million in assets and $20 million in costs, acquires Bank 2, which has $50 million in assets and $10 million in costs.
What factors have caused the changes in operating performance and market value for this firm?
Your company sponsors a 401(k) plan into which you deposit 12 percent of your $60,000 annual income.
How can interest rate risk adversely affect the economic or market value of an FI?
A money market mutual fund bought $1,000,000 of twoyear Treasury notes six months ago.
What is the nature of an off-balance-sheet activity? How does an FI benefit from such activities?
What is foreign exchange risk? What does it mean for an FI to be net long in foreign assets?
If international capital markets are well integrated and operate efficiently, will banks be exposed to foreign exchange risk?
If an FI has the same amount of foreign assets and foreign liabilities in the same currency, has that FI necessarily reduced the risk .
If a bank invested $50 million in a two-year asset paying 10 percent interest per year and simultaneously issued a $50 million one-year liability.
What happened to the dollar? Did it appreciate or depreciate against the euro (€)?
What is the current value of the British loan principal in dollars and pounds?
Suppose you purchase a 10-year AAA-rated Swiss bond for par that is paying an annual coupon of 8 percent and has a face value of 1,000 Swiss francs.
In what ways does the credit analysis of a mid-market borrower differ from that of a small-business borrower?
Explain how modern portfolio theory can be applied to lower the credit risk of an FI's portfolio.
If her bank requires a gross debt service ratio of no more than 30 percent, will Jane be able to obtain the mortgage?
The balance in the firm's cash account was $950,000 at the beginning of 2012 and $1,025,000 at the end of the year.
The income statement shows that net income is $315 million and depreciation expense is $46 million.
Calculate and interpret the Altman's Z-score for this firm.
Countrybank offers one-year loans with a stated rate of 10 percent but requires a compensating balance of 10 percent.
The FI has estimated the risk premium on the steel manufacturing sector to be approximately 0.18 percent, based on two years of historical data.
A bank has two loans of equal size outstanding, A and B, and the bank has identified the returns they would earn in two different states of nature.