The following are the assets and liabilities of agovernment security dealerAssets $150 million 30-day Treasury bills$275 million 91-day treasury bills$90 million 180-day municipal notes$350 million 2-year Treasury notesLiabilities $575 million 14-day repurchaseagreements$290 million 1-year commercial paper$425 million 30-day repurchaseagreementsUse the repricing model to determine thefunding gap for a maturity bucket of 91 daysa. -$150 millionO b. -$60 millionO c.-$250 millionO d. -$575 million

Funding GAP: For each time bucket, the difference between rate-sensitive assets (RSA) and…

Answered: The following are the assets and…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 9P

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The University Club recently issued 1,500,000 of 10-year, 9% bonds at an effective interest rate of 10%. Bond interest is payable annually. You have been asked to calculate the issuance price of the bonds and prepare amortization schedules for any discount or premium. The worksheet BONDS has been provided to assist you. Note that the worksheet contains a scratch pad at the bottom that has been preprogrammed to automatically compute and display the relevant cash flows needed for bond pricing.
Use the following information about IGI security dealer. Market yields are in parenthesis, and amounts are in millions. Assets Liabilities and Equity Cash $10 Overnight Repos $170 1 month T-bills (7.05%) 75 Subordinated debt 3 month T-bills (7.25%) 75 7-year fixed rate (8.55% 150 2 year T-notes (7.50%) 50 8 year T-notes (8.96%) 100 5 year munis (floating rate) (8.20% reset every 6 months) 25 Equity 15…
The Bima insurance has reported the following statement of financial position for the year ended 2012. Assets Sh ‘M’ Rate 90-day Treasury bills 5 9% 3-year floating rate mortgages 10 10-year, fixed-rate mortgages: 11 10% 90-day, fixed-rate loans: 35 9% Property: 4 Liabilities Demand deposits: 12 0% Interbank borrowings (with maturities less than 90 days):…
Suppose the Fed conducts an open market purchase by buying $10 million in Treasury bonds from Acme Bank. Sketch out the balance sheet changes that will occur as Acme converts the bond sale proceeds to new loans. The initial Acme bank balance sheet contains the following information: Assets Reserves 30 Bonds 50 Loans 50 Liabilities Deposits 300 Equity Owner’s Equity 30
Moonstone Company reported the following information at year-end: *Government treasury bills of P2,500,000, purchased on December 31 at which time they had two months to go until maturity. *Cash of P5,000,000 in the form of coin, currency and savings account. *Commercial papers of P1,500,000 with term on 9 months but purchased on Dec. 31 at which time they had three months to go until maturity. *Share investments of P500,000 that are very actively traded in stock market. What total amount should be reported as “cash”?
CC had the following information related to its current liabilities for the year ended December 31, 2022. Notes payable arising from 5-year bank loans, on which a security valued at P600,000 have been pledge as security, due on December 31, 2023. P500,000 Accounts payable, net of debit balances of P50,000 770,000 Trade notes payable due in 15 months 280,000 Salaries payable 90,000 Employee income tax withheld 11,000 Bonus and profit sharing payable 70,000 Liability for income taxes 250,000 Cash dividends payable 100,000 Share dividend payable 150,000 Dividend in arrears on preference shares 200,000 How much should CC report as current liabilities in its December 31, 2022 statement of financial position?
Suppose the Fed conducts an open market purchase by buying $10 million in Treasury bonds from Acme Bank. Sketch out the balance sheet changes that will occur as Acme converts the bond sale proceeds to new loans. The initial Acme bank balance sheet contains the following information: Assets – reserves 30, bonds 50, and loans 50; Liabilities – deposits 300 and equity 30.
Consider an FI with the following off-balance-sheet items: A two-year loan commitment with a face value of $120 million, a standby letter of credit with a face value of $20 million and trade-related letters of credit with a face value of $70 million. All counterparties have a credit rating of BBB. What is the total capital amount the FI needs to hold against these exposures? (Assume data obtained from 2020 FI records) Select one: A. $5.04 million B. $9.87 million C. $8.4 million D. $7.52 million
Gunnison Insurance has reported the following balance sheet (in thousands): Assets Liabilities and Equity 2-year Treasury note $195 1-year commercial paper $150 15-year munis $205 5-year note $185 Equity $65 Total Assets $400 Total Liabilities & Equity $400 All securities are selling at par equal to book value. The two-year notes are yielding 5 percent, and the 15-year munis are yielding 9 percent. The one-year commercial paper pays 4.5 percent, and the five-year notes pay 8 percent. All instruments pay interest annually. Question: What is the maturity…
The following information is also available: 1. Current assets include cash P3,800, accounts receivables P18,500, note receivables (maturity date is on July 1,2023) P10,000 and land P12,000. 2. Long term investments include a P4,600 investment in fair value though other comprehensive income securitiesthat is expected to be sold in 2022 and a P9,000 investment in AllDay company bonds that are expected to be helduntil their December 31, 2029 maturity date. 3. Property and equipment include buildings costing P63,400, inventories costing P30,500 and equipment costingP29,600. 4. Intangible assets include patents that cost P8,200 and on which P2,300 amortization have accumulated, andtreasury shares that costs P1,800. 5. Other assets include prepaid insurance (which expires on November 30, 2022) P2,900, sinking fund for bondretirement P7,000 and trademarks that cost P5,200 and on which P1,500 amortization has accumulated. 6. Current liabilities include accounts payable P19,400, bonds payable…
The following information is also available: 1. Current assets include cash P3,800, accounts receivables P18,500, note receivables (maturity date is on July 1,2023) P10,000 and land P12,000. 2. Long term investments include a P4,600 investment in fair value though other comprehensive income securitiesthat is expected to be sold in 2022 and a P9,000 investment in AllDay company bonds that are expected to be helduntil their December 31, 2029 maturity date. 3. Property and equipment include buildings costing P63,400, inventories costing P30,500 and equipment costingP29,600. 4. Intangible assets include patents that cost P8,200 and on which P2,300 amortization have accumulated, andtreasury shares that costs P1,800. 5. Other assets include prepaid insurance (which expires on November 30, 2022) P2,900, sinking fund for bondretirement P7,000 and trademarks that cost P5,200 and on which P1,500 amortization has accumulated. 6. Current liabilities include accounts payable P19,400, bonds payable…
Consider the following balance sheet for Northern Highland Credit Union (NHCU) before answering parts (i) through (v). Assets ($ million) $ Liabilities ($ million) $ Cash 30 Overnight interbank borrowing (7.00%) 160 T-notes 2 month (7.05%) 60 2-year CD (5%) 20 T-notes 3 months (7.25%) 80 7 year fixed rate Subordinated debt (8.55%) 150 T-notes two-year (7.50%) 60 Equity 25 T-notes 10-year (8.96%) 100 Corporate bonds (>5 years to maturity) 25 Total assets 355 Total liabilities and Equity 355 What is the repricing (funding) gap over the 0-to-6 months maturity bucket?

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