What is the minimum transfer balance

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Reference no: EM131314712

1. An investor holds two bonds, one with 5 years until maturity and the other with 20 years until maturity. Which of the following is more likely if interest rates suddenly increase by 2%?

a. Both bonds will decrease in price similarly.

b. The 5-year bond will decrease more in price.

c. Neither bond will decrease in price, but their yields will increase.

d.The 20-year bond will decrease more in price.

2. A treasury manager is in the process of developing cash transfer rules for the firm. Currently, the firm's bank charges $15 per wire and $0.30 per ACH. The ACH takes 1 day longer to clear. The firm's account earns an earnings credit rate of 0.50%, and the required reserve ratio is 10%. If the firm's opportunity cost of funds is 6.5%, what is the minimum transfer balance?

a. $82,276.35

b. $84,230.75

c. $86,546.15

d. $88,685.95

Reference no: EM131314712

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