Suppose that a bank has 10 billion of one-year loans and 30

Assignment Help Finance Basics

Reference no: EM13616052

Suppose that a bank has $10 billion of one-year loans and $30 billion of five year loans. These are financed by $35 billion of one-year deposits and $5 billion of five-year deposits. The bank has equity totaling $2 billion and its return on equity is currently 12%. Estimate what change in interest rate next year would lead to the bank's return on equity being reduce to zero. Assume that bank is subject to a tax rate of 30%.

Reference no: EM13616052

Questions Cloud

If brenda contributes 630 at the end of each month to her : if brenda contributes 630 at the end of each month to her retirement account that pays 8.75 compounded semiannually how

A couple wants to renovate their house in 3 years they need : a couple wants to renovate their house in 3 years. they need 27000 which they plan to save for in monthly payments in

An infinitely long line of charge has a linear charge : an infinitely long line of charge has a linear charge density of 4.50times10-12. a proton is at distance 15.5 from the

Suppose z is standard normal random variable calculate the : suppose z is standard normal random variable. calculate the following possibilities.a.pzgt1.5b.p-0.33 ltz lt1.33c. pz

Suppose that a bank has 10 billion of one-year loans and 30 : suppose that a bank has 10 billion of one-year loans and 30 billion of five year loans. these are financed by 35

A sample of 850 people resulted in a confidence interval : 1. for a standard normal model find the z-value that is less than the mean and for which 67 of the area under the

Will a highly leveraged company do better or worse during : will a highly leveraged company do better or worse during an economic recession then a company that is not highly

Mother and daughter enterprises is a relatively new firm : mother and daughter enterprises is a relatively new firm that appears to be on the road to great success. the company

What is the constant amount he needs to save in the bank : sandy is planing his retirement.the rate of interest that he can lend and borrow at the bank is 6 percent. he currently

User Account

All Pages