DurationAmount$75 million$750 millionAssetsRateCash1.75 years12 percent9 percentLoansTreasuries$175 million7.00 yearsLiabilities and EquityTime Deposits1.75 vears7 percent8 percent$350 millionCDs$575 million2.50 vearsEquityS75 millionCalculate the duration of the liabilities to four decimal places.O 1.75 years.2.22 years.2.125 years.2.50 years.2.05 years.

The duration of liabilities is calculated as sum of weighted average of duration of individual…

Assets Amount Rate Duration Cash $75 million Loans $750 million $175 million 12 percent 9 percent 1.75 years 7.00 years Treasuries Liabilities and Equity Time Deposits $350 million 7 percent 8 percent 1.75 years 2.50 years CDs $575 million Equity S75 million Calculate the duration of the liabilities to four decimal places. O 1.75 years. 2.22 years. 2.125 years. 2.50 years. O 2.05 years.

Assets Amount Rate Duration Cash $75 million Loans $750 million $175 million 12 percent 9 percent 1.75 years 7.00 years Treasuries Liabilities and Equity Time Deposits $350 million 7 percent 8 percent 1.75 years 2.50 years CDs $575 million Equity S75 million Calculate the duration of the liabilities to four decimal places. O 1.75 years. 2.22 years. 2.125 years. 2.50 years. O 2.05 years.

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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Home detail- $499,900
5 1/2 interest rate for 30 years is 5.67789
fond the periodic deposit and intrest earned. C Future compounding time periodic interest in Value r frequency deposit (m) earned years $ $ $25,000 7.9% annually 11 $ $250,000 3% semiannually 13 $ $ $ $125,000 2.2% quarterly 15 $ $ $150,000 6.2% monthly 7 $ $ $125,000 4% weekly 15
None
An oil-drilling company must choose between two mutually exclusive extraction projects, and each requires an initial outlay at t = 0 of $12 million. Under Plan A, all the oil would be extracted in 1 year, producing a cash flow at t 1 of $14.4 million. Under Plan B, cash flows would be $2.1323 million per year for 20 years. The firm's WACC is 12.8%. a. Construct NPV profiles for Plans A and B. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. If an amount is zero, enter "0". Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to two decimal places. Discount Rate NPV Plan A NPV Plan B 0% $ million $ million 5 million million 10 million million 12 million I million 15 million 17 20 million million million million million Identify each project's IRR. Do not round intermediate calculations. Round your answers to two decimal places. Project A: % Project B: % Find the crossover…
QUESTION 7 A bank makes a 30 year Fully Amortizing FRM for $2,000,000 at an annual interest rate of 4.125% compounded monthly, with monthly payments.Suppose inflation is 2% per year, compounded monthly. What is the real value of the 20th payment? O A. $9,375.48 O B. $9,050.06 OC. $9,692.99 OD. $6,523.11
8. An amount of P 5000 is deposited in a bank paying an annual interest rate of 3.1% compounded continuously. Find the balance after 3 years. A. P 8754.31 B. P 4857.31 C. P 7584.31 D. P 5487.31
Bank of Charub ($ million)Assets: Liabilities and Net Worth:270 day US Treasury bills $500m 1 year Certificates of Deposit $550m2 year consumer loans Demand Deposits $750mFixed rate, 12% p.a. annually $275m 2 year Bonds $175m7 year commercial loans $350m Fixed rate, 7.5% p.a. annuallyFixed rate, 9% p.a. annually Overnight Fed Funds $350m10 year fixed rate mortgages $675mFixed rate, 6.5% p.a. monthly10 year floating rate mortgages $125m Equity $100mLIBOR+50bp, monthly roll dateNotes: The 1 year Certificates of Deposit pay 1.95% p.a. annually. The demand depositsare non-interest bearing and have a duration of zero. The 7 year commercial loans have aduration of 4.75 years. The fixed rate mortgages have a duration of 8.3 years. All valuesare market values. 5. What is the convexity of the 2 year consumer loans if they yield 6% p.a. witha coupon rate of 12% p.a. paid annually?a. 4.98b. 2.83c. 3.85d. 1.95e. 2.01
A financial instrument provides three future cash flows: 1. $1,406.01 at the end of 2 years 2. $2,596.43 at the end of 8 years 3. $1,172.62 at the end of 13 years Calculate the duration (D) of the financial instrument at a yield of 7% pa compounded yearly. Give your answer in years to 2 decimal places. D years
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Subject: Finance

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