User Account

All Pages

How many futures contracts must village bank sell

Assignment Help Finance Basics
Reference no: EM131633813

Question: Village Bank has $240 million worth of assets with a duration of 14 years and liabilities worth $210 million with a duration of four years. In the interest of hedging interest rate risk, Village Bank is contemplating a macrohedge with interest rate T-bond futures contracts now selling for 102-21 (32nds). The T-bond underlying the futures contract has a duration of nine years. If the spot and futures interest rates move together, how many futures contracts must Village Bank sell to fully hedge the balance sheet?

Reference no: EM131633813

Questions Cloud

How does my company identify new markets and opportunities : How would you determine whether the opportunities are likely to contribute to the business - Who are eight of the key stakeholders
What is the single most important part of your education : What is the single most important part of your education, which made your externship more successful? in health care administration
What is the upper limit ci and lower limit ci : Construct a 95% confidence interval for the difference in proportions of women who deliver preterm. What is the Upper Limit CI and Lower Limit CI?
Explaining the various types of biological agents : As a safety professional, you have been asked to draft a handbook explaining the various types of biological agents employee may have contact.
How many futures contracts must village bank sell : Village Bank has $240 million worth of assets with a duration of 14 years and liabilities worth $210 million with a duration of four years.
Can genetic technology offer solution to world food shortage : Explain opinion regarding following question Can genetic technology offer a solution to world food shortages (an environmental problem)?
What is public speaking explain effective communication : What is public speaking explain effective communication ,Aspects determining an effective speech
Who is responsible for preparing the federal budget : Who is responsible for preparing the federal budget? How is the final federal determined? Explain in detail how the government creates its budget
Expected change in market value on the bond portfolio : An FI has a $100 million portfolio of six-year Eurodollar bonds that have an 8 percent coupon. The bonds are trading at par and have a duration of five years.

Reviews

Write a Review

Finance Basics Questions & Answers

  Tmmie harris is considering an investment that pays 65

1.present value tommie harris is considering an investment that pays 6.5 percent annually. how much must he invest

  Did you learn anything interesting

What about a country that someone else wrote about? Did you learn anything interesting? My country was New Zealand.

  Find the pre-tax income

Molteni Motors Inc. recently reported $6 million of net income. Its EBIT was $13 million, and its tax rate was 40%. What was its interest expense?

  Big doms pawn shop charges an interest rate of 14 percent

big doms pawn shop charges an interest rate of 14 percent per annum on loans to its customers. like all lenders big

  What required rate of return would result in a price

What required rate of return for this stock would result in a price per share of $28? If McCracken expects both earnings and dividends to grow at an annual rate of 10%, what required rate of return would result in a price per share of $28?

  Both convertibility and warrants attached to debt aim at

both convertibility and warrants attached to debt aim at increasing the attractiveness of debt securities and lowering

  Describe fundamental steps in the financial planning process

Identify the strengths and weaknesses of Jan and Bill's current financial scenario and describe the fundamental steps in the financial planning process that Jan and Bill could take to improve their overall financial outlook.

  Briefly describe each of the following phases of the

briefly describe each of the following phases of the capital budgeting process a identification phase b evaluation

  Why the present value of a cash flow stream

Explain why the present value of a cash flow stream, and the asset associated therewith; fluctuate in value with the level of interest rates.

  The exercise price on one of orne corporations call options

the exercise price on one of orne corporations call options is 35 and the price of the underlying stock is 34. the

  Select a company that has gone public in the last few year

Select a company that has gone public in the last few years

  Examine and discuss the evolving role of the cfo

Examine and discuss the evolving role of the CFO. What significant changes have occurred in recent years? What changes do you see evolving in the next 10 years? Support each of your observations with credible references.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd