User Account

All Pages

What is the optimal number of swap contracts

Assignment Help Business Management
Reference no: EM132794411

A bank has assets of $500,000,000 and equity of $40,000,000. The assets have an average duration of 5 years, and the liabilities have an average duration of 2 years. An 8-year fixed-rate T-bond with the same coupon as the fixed-rate on the swap has a duration of 5 years, and the duration of a floating-rate bond that reprices annually is one year. The bank wishes to hedge its balance sheet with swap contracts that have notional contracts of $100,000. What is the optimal number of swap contracts into which the bank should enter?

Reference no: EM132794411

Questions Cloud

What is the value of the equity in the firm : What is the value of the equity in this firm? Fiscal Unity Inc.'s assets are currently worth $50,800. These assets are expected to be worth $44,000
Discuss about the family support profession : Indicate how the family support profession has successfully or unsuccessfully dealt with the necessity of providing services in a culturally inappropriate.
Determine the project net present value : The tax rate is 21%, and United Technologies uses straight-line depreciation for tax purposes. Determine the project net present value
Find what is the adjusted gross income : Find what is their (a) adjusted gross income; (b) their total itemized deductions; (c) the amount of their exemptions; and (d) their taxable income.
What is the optimal number of swap contracts : What is the optimal number of swap contracts into which the bank should enter?
Relationship between bond prices and interest rates : In need help with these questions why is there a market for bonds? Why do some financial analysts treat preferred stock as a special type of bond rather than eq
What is the impact of the stereotypes : Consult In Whose Honor? Provide an analysis of the arguments for and against these mascots. What do these positionings reflect in relation to the legacy.
Calculate david taxable income assuming is self-supporting : David, a single 18-year old taxpayer, Calculate David's taxable income assuming he is (a) self-supporting and (b) a dependent of his parents.
What is the daily earnings at risk of bond portfolio : The maximum potential adverse move in yields is estimated at 20 basis points. What is the daily earnings at risk (DEAR) of this bond portfolio?

Reviews

Write a Review

Business Management Questions & Answers

  Caselet on michael porter’s value chain management

The assignment in management is a two part assignment dealing 1.Theory of function of management. 2. Operations and Controlling.

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. An analysis into the launch of Mountain Man Light over the present Mountain Man Lager.

  Analysis of the case using the doing ethics technique

Analysis of the case using the Doing Ethics Technique (DET). Analysis of the ethical issue(s) from the perspective of an ICT professional, using the ACS Code of  Conduct and properly relating clauses from the ACS Code of Conduct to the ethical issue.

  Affiliations and partnerships

Affiliations and partnerships are frequently used to reach a larger local audience? Which options stand to avail for the Hotel manager and what problems do these pose.

  Innovation-friendly regulations

What influence (if any) can organizations exercise to encourage ‘innovation-friendly' regulations?

  Effect of regional and corporate cultural issues

Present your findings as a group powerpoint with an audio file. In addition individually write up your own conclusions as to the effects of regional cultural issues on the corporate organisational culture of this multinational company as it conducts ..

  Structure of business plan

This assignment shows a structure of business plan. The task is to write a business plane about a Diet Shop.

  Identify the purposes of different types of organisations

Identify the purposes of different types of organisations.

  Entrepreneur case study for analysis

Entrepreneur Case Study for Analysis. Analyze Robin Wolaner's suitability to be an entrepreneur

  Forecasting and business analysis

This problem requires you to apply your cross-sectional analysis skills to a real cross-sectional data set with the goal of answering a specific research question.

  Educational instructional leadership

Prepare a major handout on the key principles of instructional leadership

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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