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Principal: $17,700
Interest rate: 8%
Compounded quarterly
Calculate the effective rate (APY) of interest for 1 year. (Use the Table provided.) (Do not round intermediate calculations. Round your final answer to the nearest hundredth percent.)
Effective rate | % |
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- Assume the following: Spot USDBRL = 5.0500 1YR USD Money Market Rates = 1.50% 1YR BRL Money Market Rates = 9.00% What is the 1YR USDBRL forward rate? (Recall that Money Market Rates are quoted as annualized rates)51. Which of the following depicts the process of computing the present value of an interest-bearing term note with an unrealistic interest rate? a. PV = Principal Amount X PV Factor for single payment b. PV = (Principal Amount X PV Factor for single payment) + [(Principal Amount X Nominal Rate) X PV Factor for ordinary annuity)] c. PV = Installment Amount X PV Factor for ordinary annuity d. PV = [Installment Amount + (Remaining Principal Amount X Nominal Rate)] X PV Factor for single payment (for each year)E7-13 PMT PERIOD TYPE INTEREST PV 20,000 8 1 4% ? PV= ($140,041.09)
- Use factors (from the tables) or a spreadsheet to determine the interest rate per period from the following equation: 0 = −40,000 + 8000(P/A,i*,8) + 8000(P/F,i*,10)Consider the following balance sheet (in millions) for an FI: Assets Liabilities Duration = 10 years $950 Duration = 2 years $860 Equity $90 What is the FI's duration gap, and FI's interest rate risk exposure ? How can the FI use futures and forward contracts to put on a macrohedge? What is the impact on the FI's equity value if the relative change in interest rates is an increase of 1 percent? That is, DR/(1+R) = 0.01. Suppose that the FI in part (c) macrohedges using Treasury bond futures that are currently priced at 96. What is the impact on the FI's futures position if the relative change in all interest rates is an increase of 1 percent? That is, DR/(1+R) = 0.01. Assume that the deliverable Treasury bond has a duration of nine years. If the FI wants to macrohedge, how many Treasury bond futures contracts does it need?Balance Sheet (dollars in thousands) and Duration (in years) Duration AmountT-bills. 0.5 $ 90T-notes 0.9 55T-bonds 4.393 176Loans 7 2,724Deposits. 1 2,092Fed. funds 0.01 238Equity 715What is the average duration of all the assets? What is the average duration of all the liabilities? What is the FI’s leverage-adjusted duration gap? What is the FI’s interest rate risk exposure? If the entire yield curve shifted upward 0.5 percent (i.e., ΔR/(1 + R) = 0.0050), what is the impact on the FI’s market value of equity? If the entire yield curve shifted downward 0.25 percent (i.e., ΔR/(1 + R) = −0.0025), what is the impact on the FI’s market value of equity?
- if the simple discount rate is 20.041%. waht is the Future value of P 51,703 after 4 years and 8 months A. 82, 631.817 B. 112, 177.816 C. 134,804.351 D. 102, 971.114 Asap plsA6 Calculate the interest rate sensitivity (change in price with respect to the interest rate) of a 1 year and a 5 year bond paying coupons of 4% when the current interest rate is 2%.Consider the following balance sheet (in millions) for an FI: Assets Liabilities Duration = 10 years $950 Duration = 2 years $860 Equity $90 What is the impact on the FI's equity value if the relative change in interest rates is an increase of 1 percent? That is, DR/(1+R) = 0.01. Suppose that the FI in part (c) macrohedges using Treasury bond futures that are currently priced at 96. What is the impact on the FI's futures position if the relative change in all interest rates is an increase of 1 percent? That is, DR/(1+R) = 0.01. Assume that the deliverable Treasury bond has a duration of nine years. If the FI wants to macrohedge, how many Treasury bond futures contracts does it need?
- Suppose we observe the following rates: 1R1= 0.75%, 1R2=1.20%, E(2r1)=0.907%. If the liquidity premium theory of the term structure of interest rates holds, what is the liquidity premium for year 2, L2?Using the following information, determine the real rate of interest: Rate % inflation 0.69 T-bill 5.00 10y T-Bond 6.00 10y AAA Corporate 6.41 10y AA Corporate 8.24FV $1,000 PMT $30 N 12 PV -$980 what is the yield to maturity rate? use a financial calculator