User Account

All Pages

Will you profit if rates fall during the year

Assignment Help Financial Management
Reference no: EM13884807

Assume that you manage the interest rate risk position for your bank. Your bank currently has a positive cumulative GAP for all time intervals through one year. You expect that interest rates will fall sharply during the year and want to reduce your bank's risk position. The current yield curve is inverted with long- term rates below short- term rates.

To reduce risk, would you recommend issuing a three month time deposit and investing the proceeds in one- year T- bills? Will you profit if rates fall during the year?

To reduce risk, would you recommend issuing a three- month time deposit and making a two- year commercial loan priced at prime plus 1 percent? Why?

Reference no: EM13884807

Questions Cloud

Is fsb positioned to profit or lose : Suppose that management has misstated the rate sensitivity of the bank's money market deposit accounts because the bank has not changed the rate it pays on these liabilities for six months and doesn't plan to change them in the near future. Will the ..
Epithelial cells of the collecting ductso : You are presented with patient X who has a genetic disease. You discover a mutation inall aquaporin2 (AQP2) channels manufactured in the epithelial cells of the collecting ductso that there is no increase in water permeability when the mutated cha..
A fancy to the isabella : You are in the market for a yacht and have taken a fancy to the'Isabella' which is advertised at $225 000. The most you can raise is $212 000 from selling your own boat and borrowing from the bank.You meet the owner in the boathouse and casually tell..
Compute the firm debt ratio and current ratio : Compute the firm's debt ratio and current ratio. Is the firm profitable? Does the balance sheet balance? Explain. If the firm paid $5,000 in dividends in 2012, what was its retained earning balance at the end of the 2009
Will you profit if rates fall during the year : To reduce risk, would you recommend issuing a three month time deposit and investing the proceeds in one- year T- bills? Will you profit if rates fall during the year? To reduce risk, would you recommend issuing a three- month time deposit and making..
Define the fundamental responsibilities : Define the fundamental responsibilities and key characteristics of the Chief Information Officer (CIO) and Chief Technology Officer (CTO) within health care organizations. Make one (1) recommendation where they can utilize their expertise to assist w..
Which of spot patterns shown is most likely shape of beam : Why can a laser disc that is written with a blue laser store more information than a laser disc that is written with a red laser? b)Laser light with a circular cross-section passes through a slit in an opaque card.
What is the importance of different interest rate forecasts : List the basic steps in DGAP analysis. What is the importance of different interest rate forecasts?
Conclude about the skewness of the business graduate incomes : In recent times it has been suggested that university graduates can be divided into two groups, those who graduated from a business degree and those who did not.  Suppose you are working for the Government and have been asked to determine whether thi..

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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