2.6. Determine the following: 2.6.1.Herfindahl-Hirschman index (HHI) with the following information of the six banks' deposits; 2.6.2.If the biggest and smallest bank (in terms of deposits) merge, what will be the HHI for all the remaining banks? | 2.6.3. Will the merger be allowed? (Ch. 9) A B C Bank ($ in millions) 70 80 90 D 120 E 140 F 200
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- Which of the following statements is false? A. Basel II use the value at risk (VaR) with a one-year time horizon and a 99.9% confidence level for calculating capital for credit risk and operational risk. B. 20 BP = 0.2% C. Basel I is increasing the amount of capital that banks are required to hold and the proportion of that capital that must be equity. D. Model-building approach is a model for the joint distribution of changes in market variables and using historical data to estimate the model parameters.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.Please answer c) & d). Thanks
- Question 1. Suppose that the central bank buys $6 billion of bonds on the open market and the banks wish to hold reserves of 8 percent. A. What is the largest amount the money supply could ultimately increase? Explain. B. What would the money multiplier be in this case? Question 2. Suppose the government multiplier is 3.5, the money multiplier is 4.5, the income multiplier with respect to the money supply is 2.5 and the marginal tax rate is 20 percent. What is the ultimate change in the government's budget deficit G – T if government spending increased by $10 billion and at the same time the central bank increased the money supply by $5 billion? (Remark: not all the information stated above is needed to answer this question. To answer this question you need to figure out by how much output changes, then figure out the change in tax revenue). Question 3. Consider an economy in which the real level of income is $500B in 2010 dollars, the government multiplier is 3, the…Question 1) 니01K 12.t where m=1+7 B(t) =d() 12 m-l a) Mutual fund is carning an APR of What monthly deposit d is needed for a balnce 'of 2million dollars in 40years? Show work.Which of the following are typical negotiable certificate of deposit (NCD) denominations? Check all that apply. $300,000 $500,000 $1,000,000 $5,000,000 Which of the following are characteristics of negotiable certificates of deposit (NCD)? Check all that apply. Firms are the most common direct investors in these securities. They provide a return in the form of interest along with the difference between the secondary market selling price and the original purchase price. Activity in their secondary market is low. Their denominations are typically in multiples of $100,000. Suppose Larry purchased an NCD a year ago on the secondary market for $991,000 and redeems it today upon maturity for $1,000,000 plus $44,000 in interest. The annualized yield on this NCD is: 4.81% 5.19% 5.35% 5.78%
- Question 1) 401K where m= | + BCE) =d (), 12.t m-1 la) Mutual fund is earning an APR of 9%. (r=.09). What monthly deposit d is needed for a balance 'of 2million dollars in 40years? Show work. b) Assume uour mutual fund is eaning an APR of 107. (r=10). What monthly deposit d is needed for a balance of 2million dollars in 4Ouears? C) Assume your mutual fund is earning an APR of 11% (F=.l1). What monthly deposit is needed for a balance of 2million dollars in 40uears?Question 5.A bank has borrowing needs at timeT >0. Show that by combining an FRAtrade today with a libor loan at timeT, the bank can today lock in its interest cost forthe periodTtoT+α. Does the borrowing bank need to buy or sell the FRA to do this?What is the fixed rate that the bank locks in?Suppose that Xtel currently is selling at $46 per share. You buy 250 shares using $8,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 6%. Required: a. What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediately changes to: (i) $48.76; (ii) $46; (iii) $43.24? What is the relationship between your percentage return and the percentage change in the price of Xtel? b. If the maintenance margin is 25%, how low can Xtel's price fall before you get a margin call? c. How would your answer to (b) change if you had financed the initial purchase with only $5,750 of your own money? d. What is the rate of return on your margined position (assuming again that you invest $8,000 of your own money) if Xtel is selling after 1 year at: (i) $48.76; (ii) $46; (iii) $43.24? What is the relationship between your percentage return and the percentage change in the price of Xtel? Assume that Xtel…
- PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 2021 2020 Assets Current assets: Cash Accounts receivable Inventory Investments $242,000 98,000 105,000 5,000 $ 130,000 102,000 90,000 3,000 Long-term assets: Land Equipment Less: Accumulated depreciation 580,000 890,000 (528,000) $1,392,000 580,000 770,000 (368,000) $1,307,000 Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payab le Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings $ 109,000 7,000 9,000 95,000 13,000 6,000 2$ 110,000 220,000 800,000 357,000 $1,392,000 $1,307,000 800,000 173,000 Total liabilities and stockholders' equity Additional information for 2021: 1. Net income is $184,000. 2. Sales on account are $1,890,000. 3. Cost of goods sold is $1,394,250.Long-term mutual funds primarily invest in assets that have O A. Assets that have maturities of less than one year B. Assets that have maturities of greater than one year OC.US Treasury Bills O D. Hybrid carsA3) Finance Vanguard DAX 30 Mutual Fund seeks to track the return of the DAX 30 Index, the index consisting of the 30 major German blue-chip stocks. Vanguard DAX 30 Exchange Traded Fundseeks to track the return of the same DAX 30 Index. Which of the following statements about the above mutual fund and ETF is correct? a. Both of these funds can be bought on the German stock exchange b. The mutual fund is professionally managed, while the exchange traded fund is not c. Both of these funds can be bought directly via Vanguard (the investment company) d. None of the above
