User Account

All Pages

What will be the net after-swap yield on assets for the bank

Assignment Help Finance Basics
Reference no: EM132509818

A company has funded 10 percent fixed-rate assets with variable-rate liabilities at LIBOR + 2 percent. A bank has funded variable-rate assets with fixed-rate liabilities at 6 percent. The bank's variable-rate assets earn LIBOR + 1 percent. The company and the bank have reached agreement on an interest-rate swap with the fixed-rate swap payment at 6 percent and the variable-rate swap payment at LIBOR. Briefly discuss your results.

a. What will be the net after-swap cost of funds for the bank if the cash market liabilities are included in the analysis?

b. What will be the net after-swap yield on assets for the bank?

Reference no: EM132509818

Questions Cloud

Assistance with humanities powerpoint : What are 2 examples of contemporary hunter-gatherer societies? How do hunters and gatherers view rights to land?
Discuss the meaning of money for larry : Discuss the work and none work stressors that Larry experience, and their consequences and Discuss the meaning of money for Larry.
Find the present value of the cash outflow : Pearson Limited acquires the net assets of Hardman Limited for a cash consideration of $80 000. Find the present value of the cash outflow
What is the forward one-year discount yield : What are the expected end-of-year profits or losses if the bank hedges its interest rate risk exposure using the swap?
What will be the net after-swap yield on assets for the bank : A company has funded 10 percent fixed-rate assets with variable-rate liabilities at LIBOR + 2 percent. A bank has funded variable-rate assets
What is the maximum amount of cost recovery : Assuming Cassie has a small net loss from her business prior to the deduction, what is the maximum amount of cost recovery Cassie can deduct
Prepare in good form a cash budget for march : Past collection history, Prepare in good form a cash budget for March. Markus Corporation's sales of gizmos are 10% for cash and 90% on credit.
Determining the exchange-traded fund : You currently hold U.S. stocks through an Exchange-Traded Fund, A.
How much should evans budget for direct labour for april : How many kilograms of plastic direct materials should Evans plan to buy during April? How much should Evans budget for direct labour for April?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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