Commercial loans with an average duration

Assignment Help Financial Management
Reference no: EM13917646

If Main Street Bank has $100 million in commercial loans with an average duration of 0.40 years; $40 million in consumer loans with an average duration of 1.75 years; and $30 million in U.S. Treasury bonds with an average duration of 6 years, what is Main Street's asset portfolio duration?

PLEASE WORK THE PROBLEM OUT

Reference no: EM13917646

Questions Cloud

Calculate the IRR of the Mozal project : Calculate the IRR of the Mozal project. What is the real expected return using the CAPM?* Should Gencorp/Alusaf invest in the Mozal project?
What is your required return in order to invest : Apple Computers just paid a dividend of $6.94 and is expected to grow at 5%. You have estimated their beta at 0.95, with a risk free rate of 2.5% and equity risk premium of 6%. What is their current market value? You are valuing stock in Tofrandi Nat..
Residual dividend model-what will be its payout ratio : Welch Company is considering three independent projects, each of which requires a $5 million investment. The estimated internal rate of return (IRR) and cost of capital for these projects is presented below: If Welch establishes its dividends from th..
What is the value of this annuity : A 4-year annuity of eight $6,200 semiannual payments will begin 6 years from now, with the first payment coming 6.5 years from now. If the discount rate is 7 percent compounded semiannually, what is the value of this annuity 4 years from now?
Commercial loans with an average duration : If Main Street Bank has $100 million in commercial loans with an average duration of 0.40 years; $40 million in consumer loans with an average duration of 1.75 years; and $30 million in U.S. Treasury bonds with an average duration of 6 years, what is..
Further assume that the returns are normally distributed : Suppose the average return on an asset is 11.5 percent and the standard deviation is 20 percent. Further assume that the returns are normally distributed. Use the NORMDIST function in Excel to determine the probability that in any given year you will..
Ethics codes apply to project selection-capital budgeting : Financial executives insist that there should be no separation between an individual's personal ethics and his or her business ethics. How do ethics codes apply to project selection and capital budgeting? What are the potential risks to a company of ..
A nursing home projects asset growth : A nursing home projects asset growth at 10 percent per year over the next 10 years. If it wishes to reduce its reliance on debt financing, what rate of equity growth over the 10-year period will be desired?
Find the weight that yields the minimum variance portfolio : Consider a portfolio choice problem in a world with risk free rate rf and two risky assets i = 1; 2. Assume that one asset has both a higher expected return and volatility than the other, so that 1 > 2 and 1 > 2, and that the returns to each are unco..

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate the accounting profit and the economic profit

Gomez runs a small pottery firm. He hires one helper at $15,500 per year, pays annual rent of $5,500 for his shop, and spends $21,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) t..

  What will be the value of your portfolio

Imagine that you are holding 5,000 shares of stock, currently selling at $40 per share. You are ready to sell the shares but would prefer to put off the sale until next year due to tax reasons. What will be the value of your portfolio in January (net..

  Question 1consider an asset which pays continuous

question 1consider an asset which pays continuous dividend.nbsp letnbsp s 100 and r10.nbspsuppose the 6-month futures

  Debt obligations outstanding during the construction period

Harrisburg Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $5,016,100 on January 1, 2014. Harrisburg expected to complete the building by December 31, 2014. Harrisburg has ..

  Future value if the interest rate is a simple interest rate

Find the future value of $10,000 invested now after five years if the annual interest rate is 8 percent. What would be the future value if the interest rate is a simple interest rate? What would be the future value if the interest rate is a compound ..

  Create synthetic callable debt from non-callable debt

You have graduated, and are on the staff of the Assistant Treasurer of company CKS. (You are an assistant to the Assistant Treasurer.) Your boss, the Assistant Treasurer, recently attended a conference at which he heard that swaptions could be used t..

  Foreign taxes can be applied as credit against mncs

Tax credits A U.S.-based MNC has a foreign subsidiary that earns $250,000 before local taxes, with all the after-tax funds to be available to the parent in the form of dividends. Foreign taxes can be applied as a credit against the MNC's U.S. tax lia..

  Corporation tax rate-tax weighted average cost of capital

Given the corporation tax rate of 30% the before tax weighted average cost of capital for Le Monde is lower than its after tax WACC. For le monde corporation, the costs of various types of capital are as follows:

  When it comes to estimate beta

When it comes to estimate Beta, what compromises do we usually make? And in your opinion, which one (or several) of these compromises are mostly likely to affect the validity of beta estimates? Please provide your reasoning.

  Bonds currently sell-yield to maturity

Crossfade Co. issued 16-year bonds two years ago at a coupon rate of 8.5 percent. The bonds make semiannual payments.

  What is the companys cost of equity

The Absolute Zero Co. just issued a dividend of $2.55 per share on its common stock. The company is expected to maintain a constant 5.3 percent growth rate in its dividends indefinitely. If the stock sells for $51 a share, what is the company’s cost ..

  Asset-liability-revenue-expense-equity or nothing

Determine whether each of the following is an asset, liability, revenue, expense, equity, or nothing. If more than one account is affected, analyze the impact on all accounts. Assume a year-end of December 31st. Justify your answer with appropriate "..

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