Jse the following balance sheet and find the effect on net interest income if the interest on ncome will rise by 0.5% and interest on liabilities will rise by 0.75%. The two-year runoff s expected in 8-year T-notes by $20. Note: The planning period is 2-years. Assets Cash 1 month T-bills (7.05%) 3 month T-bills (7.25%) T-notes (7.50%) Liabilities and Equity Overnight Repos Subordinated debt $10 $170 75 75 7-year fixed rate (8.55% 150 2 50 year 8 vear Tnotes (8 060/) 100
Jse the following balance sheet and find the effect on net interest income if the interest on ncome will rise by 0.5% and interest on liabilities will rise by 0.75%. The two-year runoff s expected in 8-year T-notes by $20. Note: The planning period is 2-years. Assets Cash 1 month T-bills (7.05%) 3 month T-bills (7.25%) T-notes (7.50%) Liabilities and Equity Overnight Repos Subordinated debt $10 $170 75 75 7-year fixed rate (8.55% 150 2 50 year 8 vear Tnotes (8 060/) 100
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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Transcribed Image Text: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.
Liabilities and Equity
Overnight Repos
Subordinated debt
7-year fixed rate (8.55%
Assets
Cash
$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
75
150
50
100
25
$335
Equity
Total Liabilities & Equity
15
$335
(A) SO.375
(B) $0.855
(C) $1.555
(D) S0.585
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