User Account

All Pages

What is the duration of the bank existing loans

Assignment Help Finance Basics
Reference no: EM132658734

A bank wants to use direct refinancing to manage its duration gap, DG. Currently, for its assets, Loans = $22 million and Cash = $6 million. Equity = $4 million. Average DA = 2.75 yrs, and average DL = 4 yrs.

1 Should the bank buy loans with cash or sell existing loans for cash to reduce its interest rate risk?

2 What is the duration of the bank's existing loans?

3 How much cash will be used to eliminate the bank's interest rate exposure, if the loan available on the market has a duration of 7.6 years?

Reference no: EM132658734

Questions Cloud

Which statements is true about ending work-in-process : Which of the following statements is true about the ending work-in-process inventory if equivalent units for conversion cost totaled 57,000 units
What databases would you use to start your research : You are a crime analyst; you have a client who has a case involving a drug buy for a series of homes. What databases would you use to start your research?
Model of bureaucracy : Which model of bureaucracy best explains the way the United States government currently operates?
Estimate the total overhead cost at an activity level : Estimate the total overhead cost at an activity level of 43,000 machine hours, using the separate estimates you obtained for its components
What is the duration of the bank existing loans : A bank wants to use direct refinancing to manage its duration gap, DG. Currently, for its assets, Loans = $22 million and Cash = $6 million.
Describe the stages of the life cycle of the blowfly : Forensic entomology (FE) is the study of insects as it relates to criminal or civil investigations. In criminal cases, it is used to determine postmortem.
Discuss all civil procedure issues : Assume proper jurisdiction of the subject matter, parties and venue. Discuss all civil procedure issues and give proper argument concerning motions made by Lind
Learned about monetary policy in lecture : -Explain how the Fed could increase the level of bank reserves in the economy while leaving the money supply unchanged.
How a low biometric is being used in the public sector today : Describe how a high biometric is being used in the public and private sector today. Describe how a low biometric is being used in the public and private sector.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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