Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
21.The Dark Star Savings Bank is a small savings bank operating in Dark Star, Colorado. Eleanor Swanson, CEO and President of Dark Star Savings Bank is very concerned about the volatility in the bank's net interest margin. She has talked with other bank presidents, and they have mentioned to her that it might be better for the bank to use other measures of interest rate risk, in addition to a funding gap analysis, including a duration gap measure. Ms. Swanson asks Bud Fogerty to incorporate duration analysis as an interest rate risk measure. She would also like a summary of the advantages and the limitations of duration analysis and funding gap analysis, and the risk return tradeoff between perfect hedging and a bank's NIM. Bud Fogerty would like you to take on this task. As a start, he would like you to work with a simple balance sheet and train the other managers in the bank on the concept of duration, how it is calculated for each asset and liability, how duration changes with a change in interest rates, and how the bank's equity value and net interest margin are affected by changes in interest rates. He asks you to examine different scenarios for the bank with a positive duration gap versus a duration gap close to zero. To help you with this task, Mr. Fogerty has prepared an initial hypothetical balance sheet for the following simplified bank with information on the cash flows, maturities, and annual percentage rates that you need in order to calculate the duration of individual assets and liabilities and the bank's duration gap. He has also prepared a list of questions for you to help you in your analysis. In your discussion of the limitations and benefits of duration analysis, Mr. Fogerty would like you to keep in mind the fact that a duration gap assumes an equal change in the rates on both assets and liabilities (i.e., a parallel shift in the yield curve). If this is not the case, a zero duration gap, for instance, may not completely protect the value of a bank's equity. Also, since duration is a function of market rates, duration must be closely monitored, since it will change each time a change in rates occurs
Explain why the present value of a cash flow stream, and the asset associated therewith; fluctuate in value with the level of interest rates in the capital markets.
your facility has the following payer mix 40 commercial insurances25 medicare insurance15 medicaid insurance15
Explain What is the reasonable cost of capital for average and high and low risk projects Suppose a firm estimates its WACC to be 10 %.
Identify the relationship between human resources and labor management relations and safety outcomes. Consider how efficient production and safe production are related. Also discuss other organizational factors that created a safer workplace at..
1. what is the rational for wealth maximization as a goal for a firm?2. what are the key financial statements and why
firm a has 10000 in assets entirely financed with equity. firm b also has 10000 in assets but these assets are financed
is an initial public offering an example of a primary or a secondary market transaction?
The annual operating costs (before depreciation) will consist of fixed operating costs of $25,000 plus variable operating costs equal to 75% of sales.
Sony's stock price at the end of last year was $23.50 and its earnings per share for the year were $1.30. What was its PE ratio?
Identify the three basic types of financial statements and explain how the measurements of each are interrelated.
This was posted before but the person answering the question did not type in the one word that changes two answers. The dividend YIELD increases. So the answer given was not conclusive. Please help. Thanks
a company has net income of 225000 and declares and pays dividends in the amount of 75000. what is the net impact on
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd