Use the following balance sheet and find the effect on net interest income if the interest on income will rise by 0.5% and interest on liabilities will rise by 0.75%. The two-year runoff is expected in 8-year T-notes by $20. Note: The planning period is 2-years. Assets Cash Liabilities and Equity Overnight Repos $10 $170 1 month T-bills (7.05%) 3 month T-bills (7.25%) 2 year T-notes (7.50%) 8 year T-notes (8.96%) 5 year munis (floating rate) (8.20% reset every 6 months) Total Assets 75 Subordinated debt 75 7-year fixed rate (8.55% 150 50 100 25 $335 Equity Total Liabilities & Equity 15 $335 (A) $0.375 (B) $0.855 (C) $1.555 (D) $0.585
Use the following balance sheet and find the effect on net interest income if the interest on income will rise by 0.5% and interest on liabilities will rise by 0.75%. The two-year runoff is expected in 8-year T-notes by $20. Note: The planning period is 2-years. Assets Cash Liabilities and Equity Overnight Repos $10 $170 1 month T-bills (7.05%) 3 month T-bills (7.25%) 2 year T-notes (7.50%) 8 year T-notes (8.96%) 5 year munis (floating rate) (8.20% reset every 6 months) Total Assets 75 Subordinated debt 75 7-year fixed rate (8.55% 150 50 100 25 $335 Equity Total Liabilities & Equity 15 $335 (A) $0.375 (B) $0.855 (C) $1.555 (D) $0.585
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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