Balance sheet for savings

Assignment Help Financial Management
Reference no: EM131445370

Consider the following balance sheet for X Savings (in milllions). Assets Floating rate mortgages $ 40 (Currently 9% annually) 30-year fixed rate loans (Currently 6% annually) 40 Total Assets 80 Liabilities and Equity 1-year time deposits (currently 5% annually) $ 50 3-year time deposits (Currently 7% annually) 20 Equity 10 Total liabilities and equity 80 a. What Is X’s expected net interest income at year end ? b. What will net interest income be if interest rates rise by 1 percent ? c. Using the cumulative repricing gap model, what is the expected net interest income for a 1 percent increase in interest rates ? d. What will net interest income be at year end if interest rates on rate sensitive assets increase by 1% but interest rates on rate sensitive liabilities increase by 0.5% ?

Reference no: EM131445370

Questions Cloud

University juniors and have started part-time company : Shawn and his associate, Kim, are university juniors and have started a part-time company. They focus on finding stylish products to sell while the products are a fad and then move on to finding the next product. What will be their % change in produc..
Calculate the standard deviation of returns over given year : Portfolio analysis You have been given the... Portfolio analysis You have been given the expected return data shown in the first table on three assets -?F, ?G, and H-over the period?
List the four components of gross domestic product : Can you list the four components of Gross Domestic Product(GDP) and provide an example of each
What is the duration of three-year treasury bond : What is the duration of a four-year Treasury bond with a 6 percent semiannual coupon selling at par? What is the duration of a three-year Treasury bond with a 6 percent semiannual coupon selling at par?
Balance sheet for savings : Consider the following balance sheet for X Savings (in milllions). Assets Floating rate mortgages $ 40 (Currently 9% annually) 30-year fixed rate loans (Currently 6% annually) 40 Total Assets 80 Liabilities and Equity 1-year time deposits (currently ..
What is the profit to the investment bank : An investment bank pays $ 20.50 per share for 3 million shares of X. It then sells these shares to the public for $ 22.50 per share. How much money does X receive ? What is the profit to the investment bank ? What is the stock price of X ?
Non­diversifiable risk-which is measured by beta : Non­diversifiable risk, which is measured by beta, can be lowered by adding a greater variety of stocks to a portfolio. Diversifiable risk can be lowered by adding a greater variety of stocks to a portfolio.
Calculate the firms aftertax cash outflows : Suppose your company needs to raise $36.9 million and you want to issue 24-year bonds for this purpose. Assume the required return on your bond issue will be 9.4 percent, and you're evaluating two issue alternatives.
The risks to dwight of not revising the income statement : Far from being an exact science, accounting involves estimation and judgment. Consider the case of Dwight Nelson, chief financial officer of Pilot Enterprises. Pilot is a relatively young, privately held company with thoughts of going public in the n..

Reviews

Write a Review

Financial Management Questions & Answers

  How high can discount rate be before you would reject poject

A project that costs $3,600 to install will provide annual cash flows of $860 for each of the next 6 years. A. Calculate the NPV if the discount rate is 10%? NPV = $. B. Is this project worth pursuing? Yes/No C. How high can the discount rate be befo..

  The internal growth rate

Its net income this year is $19,500 and it pays dividends of $5,400. If it grows at its internal growth rate, what will its debt/equity ratio be next year? The internal growth rate is __ %

  Compute income taxes owed for a firm

Compute income taxes owed for a firm with the following data:

  Business accounts treated differently from personal accounts

In connection with our review of the Electronic Funds Transfer Act and its applicability to unauthorized electronic transfers, please also consider: How are business accounts treated differently from personal accounts? What are some of the underlying..

  What tax rate is required to meet budgetary demands

The total assessed property value in Frame town is $77,000,500. Budget planners have determined that $5,140,900 will required providing all government services next year. What tax rate is required to meet budgetary demands? (Express your answer as a ..

  Trust fund valued

Your client has been given a trust fund valued at $1.16 million. He cannot access the money until he turns 65 years old, which is in 25 years. At that time, he can withdraw $22,000 per month. If the trust fund is invested at a 4.5 percent rate, compo..

  What was the gain or loss for shareholders and bondholders

Sunburn Sunscreen has a zero coupon bond issue outstanding with a $12,000 face value that matures in one year. The current market value of the firm’s assets is $13,800. What is the combined value of equity in the two existing companies? What is the v..

  What discount rate should api apply to the cash flows

The tax rate is 40 percent. What discount rate should API apply to the cash flows from "new" projects in the Financial Services Division?

  Identified the two mutually exclusive projects

Garage, Inc., has identified the following two mutually exclusive projects: If the required return is 11 percent, what is the NPV for each of these projects? At what discount rate would the company be indifferent between these two projects?

  What is the standard deviation of the stock returns

You find a certain stock that had returns of 18 percent, −25 percent, 21 percent, and 7 percent for four of the last five years. The average return of the stock over this period was 9.6 percent. What was the stock’s return for the missing year?  What..

  About the replacement analysis

The Gilbert Instrument Corporation is considering replacing the wood steamer it currently uses to shape guitar sides. The steamer, purchased just 2 years ago, is being depreciated on a straight-line basis and has 6 years of remaining life.

  Considering buying a dividend paying stock

A broker is considering buying a dividend paying stock. The dividend will be paid at the end of the year. The analyst consensus is the stock will worth $36 in one year. The company pays a $2.25 annual dividend and the broker expects 12% rate of retur..

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!

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