Answer? ? General Accounting A regional bank negotiates the purchase of a one-year interestrate cap with a cap rate of 5.45 percent with a large bank. Theoption has a notional principal of $2 million and costs $3,400.In one year, interest rates are 6.33 percent. The regionalbank's net profit, ignoring commissions and taxes, was:a. $105,600b. $18,400c. $17,600d. $14,200e. $11,500

Explanation: Following data is given in the question:Notional principal = $2 million; Rate cap…

Answered: A regional bank negotiates the purchase…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 30P

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Ignoring commission and taxes was
A local credit union negotiates the purchase of a one-year interest rate cap with a cap rate of 4.75 percent with a national bank. The option has a notional principal of 1.5million and costs 2,800. In one year, interest rates are 5.65 percent. The local credit union's net profit, ignoring commissions and taxes, was_.
A local credit union negotiates the purchase of a one-year interest rate cap with a cap rate of 4.75 percent with a national bank. The option has a notional principal of 1.5million and costs 2,800. In one year, interest rates are 5.65 percent. The local credit union's net profit, ignoring commissions and taxes, was_.answer this
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A bank has an interest rate spread of 150 basis points on $30 million in earning assets funded by interest-bearing liabilities. However, the interest rate on its assets is fixed and the interest rate on its liabilities is variable. If all interest rates go up 50 basis points, the bank's new pretax net interest income will be __________. a. $600,000 b. $450,000 c. $300,000 d. $250,000 e. $175,000 Clear my choice

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