Assignment
1. Prepare a Statement of Financial Position of Jeddah Financial Corporation from the following details:
|
Cash
|
518,161
|
|
Federal Funds Sold and other investments
|
1,321,626
|
|
Advanced from Federal Home Loans
|
38,961,165
|
|
Securities Available for sale, at fair value
|
382,499
|
|
Securities sold under agreements to repurchase
|
5,000,000
|
|
Senior Debts
|
8,194,266
|
|
Loans held for sale
|
83,365
|
|
Mortgage backed securities with recourse held to maturity, at cost
|
1,168,480
|
|
Interest earned but uncollected
|
392,303
|
|
Premises and Equipment, net
|
403,084
|
|
Other Assets
|
?
|
|
Loans Held for Investment
|
117,798,600
|
|
Common Stock
|
30,804
|
|
Additional Paid in Capital
|
338,997
|
|
Retained Earnings
|
81,408,185
|
2. Dammam West Bank has an obligation to pay a fixed nominal amount of $ 150, 8 years from today. Assume that the appropriate annual interest rate for this instrument, denoted r, is currently 10%. Answer the following questions:
a) What is the current value of obligation
b) What will the value of obligating if the rate of interest is increased by 4%
c) What will be value of obligation if the rate of interest is decreased by 2%
3. For a bank to accept credit risk, it must expect to be paid either interest at a sufficiently large premium above the risk-free rate or an actuarially fair fee. Considering this fact, how will you determine credit risk premium.