MB MAKEUP TEST. 1 HOUR. 1. The assets and liabilities of Utopia Bank are shown below: Utopia Bank Assets Rate-sensitive assets $20million Fixed-rate assets $100million Liabilities Rate-sensitive $40million liabilities Fixed-rate $60million Liabilities In April 2024, there was a decline in interest rates from 15% to 10%. Explain the effect of this change on Utopia Bank's income, payments, and, overall, profitability. Show your working. (3marks) 2. Explain the principles used by commercial banks in managing credit risk.
MB MAKEUP TEST. 1 HOUR. 1. The assets and liabilities of Utopia Bank are shown below: Utopia Bank Assets Rate-sensitive assets $20million Fixed-rate assets $100million Liabilities Rate-sensitive $40million liabilities Fixed-rate $60million Liabilities In April 2024, there was a decline in interest rates from 15% to 10%. Explain the effect of this change on Utopia Bank's income, payments, and, overall, profitability. Show your working. (3marks) 2. Explain the principles used by commercial banks in managing credit risk.
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:MB MAKEUP TEST. 1 HOUR.
1. The assets and liabilities of Utopia Bank are shown below:
Utopia Bank
Assets
Rate-sensitive assets
$20million
Fixed-rate assets
$100million
Liabilities
Rate-sensitive
$40million
liabilities
Fixed-rate
$60million
Liabilities
In April 2024, there was a decline in interest rates from 15% to 10%. Explain the
effect of this change on Utopia Bank's income, payments, and, overall, profitability.
Show your working. (3marks)
2. Explain the principles used by commercial banks in managing credit risk.
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