three7. New Comers State Bank has recorded the following financial data for theyears (dollars in millions):pastTwo Years Ago$ 78.0068.00400.00Current YearPrevious Year$ 82.00$ 80.0066.00Interest revenuesInterest expenses64.00Loans (excluding nonperforming)450.00425.00Investments200.00195.00200.00400.00450.00150.00425.00Total depositsMoney market borrowings125.00100.00What has been happening to the bank's net interest margin? What docaused the changes you have observed? Do you have any recommendations for NewComers' management team?youthink

Commercial banks rely heavily on net interest income, which accounts for almost half of their entire…

7. New Comers State Bank has recorded the following financial data for the past three years (dollars in millions): Previous Year $ 80.00 66.00 Two Years Ago $ 78.00 Current Year $ 82.00 64.00 450.00 200.00 450.00 150.00 Interest revenues Interest expenses Loans (excluding nonperforming) 68.00 400.00 200.00 400.00 100.00 425.00 195.00 425.00 Investments Total deposits Money market borrowings 125.00 What has been happening to the bank's net interest margin? What do caused the changes you have observed? Do you have any recommendations for New Comers' management team? you think

7. New Comers State Bank has recorded the following financial data for the past three years (dollars in millions): Previous Year $ 80.00 66.00 Two Years Ago $ 78.00 Current Year $ 82.00 64.00 450.00 200.00 450.00 150.00 Interest revenues Interest expenses Loans (excluding nonperforming) 68.00 400.00 200.00 400.00 100.00 425.00 195.00 425.00 Investments Total deposits Money market borrowings 125.00 What has been happening to the bank's net interest margin? What do caused the changes you have observed? Do you have any recommendations for New Comers' management team? you think

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The Elbow Corporation is computing the annual percentage rate of interest on its most recent borrowing of $10,000. The note carried a nominal interest rate of 10% and provided net proceeds to Elbow Corporation of $9,500 after reduction for documentary stamps and loan origination fees. The annual percentage rate of interest is: O A. 9.5% OB. 10% O C. 10.5% OD. 11%
Colson Company has a line of credit with Federal Bank. Colson can borrow up to $407,000 at any time over the course of the Year 1 calendar year. The following table shows the prime rate expressed as an annual percentage, along with the amounts borrowed and repaid during the first four months of Year 1. Colson agreed to pay Interest at an annual rate equal to 2.00 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Colson pays 6.25 percent (4.25 percent - 2.00 percent) annual Interest on $83,300 for the month of January. Month January February Month January February March April March April Required: a. Compute the amount of Interest that Colson will pay on the line of credit for the first four months of Year 1. Note: Do not round intermediate calculations. Round your final answers to the nearest whole…
3
16. Jefferson Bank made a loan at 7% interest for 236 days. If the amount of interest was $298.28, use the ordinary interest method to find the amount of principal (in $) borrowed. (Round your answer to the nearest dollar.)
Sepia Inc. issued bonds for $375,000 that were redeemable in 5 years. They established a sinking fund that was earning 5.81% compounded semi-annually to pay back the principal of the bonds on maturity. Deposits were being made to the fund at the end of every 6months.
17. Assume that a bank obtains most of its funds from long-term borrowed funds such as Federal Home Loan Bank borrowings. The bank's assets are in the form of loans with rates that adjust affected if interest rates every three months. In the next three months, the bank would be increase. A. negatively. B. favorably. C. unaffected.
The clean Bank has the following assets and liabilities as of year-end.All asset and liability item have face value of $1,000 and are priced at par.And interests and coupons are paid annually for all asset and liability items. Assets Amount($millions) Annual Rate Liabiltiies and Equity Amount($millions) Annual Rate 5-year loans 40 40% 3-year term deposit 20 4% 5-year coupon bonds 60 8% 5-year term deposit 30 8% Equity 50 Total 100 100 Please calulate the Clean Bank's maturity gap.What does the maturity gap imply about the interest risk of the bank?Will you view on the interest risk of the bank be different under duration model?Explain carefully..
(1)
A bank applies a semi-annually capitalized nominal rate of 11.8% for an investment. Calculate monthly effective rate.
Cable Company reported bond interest expense of $40,000 for the current year. During the year, the balance in the premium on bonds payable account decreased by $1,500. What was the amount of cash paid for interest expense during the year? Cash paid for interest expense
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…

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