1. What is reinvestment risk? Does it occur when a bank is short funded or long funded? What movement in interest rates will result in a loss?
2. Billy’s Crystal Stores Inc. has assets of $5,360,000 and turns over its assets 2.3 times per year. Return on assets is 4 percent. What is the firm’s profit margin (return on sales)?
3. How much is your house payment if you buy a $250,000 house, put 20% down and finance the rest at 2.85% over 15 years??