Consider the following balance sheet for ABC Company (in millions):Liabilities and Equity1-year fixed deposits(interest-rate 6% annually)3-year fixed deposits(interest-rate 7% annually)EquityTotal liabilities & equityAssetsVariable-rate mortgages$50$70(interest-rate 10% annually)30-year fixed-rate loans(interest-rate 7% annually)$20$10$100$50Total assets$100What is the expected net interest income if interest rates on Rate Sensitive Assets (RSAS)increase by 2 percent but interest rates on Rate Sensitive Liabilities (RSLS) increase by 1percent?

Net interest income refers to difference between the interest income generated and interest expenses…

Consider the following balance sheet for ABC Company (in millions): Liabilities and Equity l-year fixed deposits (interest-rate 6% annually) 3-year fixed deposits (interest-rate 7% annually) Equity Total liabilities & equity Assets Variable-rate mortgages (interest-rate 10% annually) 30-year fixed-rate loans (interest-rate 7% annually) $50 $70 $50 $20 $10 Total assets $100 $100 What is the expected net interest income if interest rates on Rate Sensitive Assets (RSAS) increase by 2 percent but interest rates on Rate Sensitive Liabilities (RSLS) increase by 1 percent?

Consider the following balance sheet for ABC Company (in millions): Liabilities and Equity l-year fixed deposits (interest-rate 6% annually) 3-year fixed deposits (interest-rate 7% annually) Equity Total liabilities & equity Assets Variable-rate mortgages (interest-rate 10% annually) 30-year fixed-rate loans (interest-rate 7% annually) $50 $70 $50 $20 $10 Total assets $100 $100 What is the expected net interest income if interest rates on Rate Sensitive Assets (RSAS) increase by 2 percent but interest rates on Rate Sensitive Liabilities (RSLS) increase by 1 percent?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The following balance sheet is to be used to answer the questions below Yields for assets & liabilities shown in % in parentheses Assets $M Liabilities & Equity $M Cash & Cash Equivalents 85 Overnight Repurchase Agreements 650 1 - month Treasury Bills (3%) 125 5 - year Fixed-rate Debt (4.5%) 450 3 - month Commercial Paper (3.75 %) 175 2 - year Consumer Loans (4.25 %) 235 Equity 160 5-year Adjustable -Rate Mortgages (3.5% resetting semiannually) 540 5 - year Fixed rate Municipal Bonds (4%) 100 Total Assets 1260 Total Liabilities & Equity 1260 a. Calculate the firm's repricing gap over the following intervals: $M 30 Days 90 Days 2 Years b. Compute the impact over the next 90 days on net interest income under the following changes in interest rates $M +75bps -100bps c. Runoffs on consumer and mortgage loans over the next year above are $30M and $50M, respectively What would be the 1 - year repricing gap? $M d. Taking into account the effect of runoffs, what is the effect on net interest…
assume a 30-year $200,000 mortgage loan with an apr of 7%. what is the amount of interest and principal, respectively applied from the first annual fixed payment? a) $7,000; $133.33 b)$133.33; $7,000 c)$14,000; $2,177.28 d) $2,177.28; $14,000
The debt is amortized by the periodic payment shown Compute (a) the number of payments required to amortize the debt, (b) the outstanding principal at the time indicated Debt PrincipalDebt Payment Payment Interval Conversion Period monthly Outstanding Principal After: 6th payment Interest Rate $16,000 $1,419 3 months 6% (a) The number of payments required to amortize the debt is Round up to the nearest integer.) (b) The outstanding principal is S (Round the final answer to the nearest cent as needed Round all intermediate values to six decimal places as needed).
The debt is amortized by the periodic payment shown Compute (a) the number of payments required to amortize the debt, (b) the outstanding principal at the time indicated Payment Interval 1 month Conversion Period quarterly Outstanding Principal After: dth payment Dobt Principal Debt Payment Interest Rate $17.000 $1.265 6% (a) The number of payments required to amortize the debt is (Round up to the nearest integer.) (b) The outstanding principal is s (Round the final answer to the nearest cent as needed Round all intermediate values to six decimal places as needed)
Given the annual interest rate and a line of an amortization schedule for that loan, complete the next line of the schedule. Assume that payments are made monthly. Annual Interest Paid on Interest Rate Payment Paid Principal Balance 11.6% $425.57 $64.23 $361.34 $6,280.78 Fill out the amortization schedule below. Annual Interest Paid on Payment Balance Interest Rate Paid Principal 11.6% $425.57 $64.23 $361.34 $6,280.78 (Round to the nearest cent as needed.)
Fl in an amortization table (in dollars) for a loan of $8,500 to be paid back over 2 years, at an annual interest rate of 1.3, compounded quarterly. For eech value in the table, round your answer to the nearest cent and use this value to calculate the next value. Payment number Payment amount Payment amount to interest Payment amount to debt Outstanding principal S0.500 13 14
The Bima insurance has reported the following statement of financial position for the year ended 2012. Assets Sh ‘M’ Rate 90-day Treasury bills 5 9% 3-year floating rate mortgages 10 10-year, fixed-rate mortgages: 11 10% 90-day, fixed-rate loans: 35 9% Property: 4 Liabilities Demand deposits: 12 0% Interbank borrowings (with maturities less than 90 days):…
Consider the first payment against a $200,000 mortgage that last for 25 years. Fixed repayments are made on a monthly basis. The first row of the amortization schedule is shown below. Payment # Payment Interest 1 d 716.67 2 Debt Payment Balance P1 b₁
This amortization table shows the first 6 payments on a 15-year mortgage. Payment Monthly Interest PrincipalOutstanding number payment paid paid balance $75 000.00 $594.92$315.42 $279.50 $74 720.50 $594.92$314.24 $280.68 $74 439.82 $594.92$313.06 $281.86 $74 157.96 $594.92$311.87 $283.05 $73 874.91 $594.92$310.68 $284.24 $73 590.68 $594.92$309.49 $285.43| $73 305.25 1 2 3 4 What percent of the mortgage has been paid after 6 payments? a) 2% O b) 3% O c) 98% O d) 5%
A Collateralized Mortgage Obligation (CMO) principal balance is $1,000,000,000. The pass thru rate is 5.35%. The Weighted Average Coupon rate is 6.35%. The weighted Average Months is 350. The PSA is 90. 3-What is the month 1 CMO total cash flow from pass thru interest, scheduled principal and prepaid principal? 1-What is the total prepaid principal in month 30 of the Weighted Average Loan Age? 2- Within how many months from the creation of the CMÓ will tranche C principal be totally paid?
The debt is amortized by the periodic payment shown. Compute (a) the number of pa indicated. Debt Principal Debt Payment $15,000 $1348 Payment Interval 3 months Interest Rate 10% Conversion Period quarterly Outs Princi 8th ... (a) The number of payments required to amortize the debt is (Round the final answer up to the nearest whole number. Round all intermediate value
Which investment does the equation 4 - 1800(1+0.035) represent? a) A $1800 corporate bond earning 8% compounded annually for 3.5 years b) A $1800 corporate bond earning 3.5% compounded annually for 8 years Oc) A $1800 corporate bond earning 3.5% simple interest annually for 8 years d) A $1800 corporate bond earning 0.35% compounded annually for 8 years

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