Suppose a bank makes a two-year $20,000 loan with the entire principal amount due in two years at an annual rate of 4.25%. The bank funds this with a six-month $20,000 CD at a cost of 1.75 %. What is the bank's six month static GAP? O $20,000 O $10.000 O $0 O $10,000 O $20,000
Suppose a bank makes a two-year $20,000 loan with the entire principal amount due in two years at an annual rate of 4.25%. The bank funds this with a six-month $20,000 CD at a cost of 1.75 %. What is the bank's six month static GAP? O $20,000 O $10.000 O $0 O $10,000 O $20,000
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 14P
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![Suppose a bank makes a two-year $20,000 loan with the entire principal amount due in two years at an annual rate of 4.25%. The bank funds
this with a six-month $20,000 CD at a cost of 1.75%. What is the bank's six month static GAP?
O $20,000
O $10.000
O $0
O $10,000
O $20,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbfe90c1a-402d-4732-aba9-b8492dc688c9%2Fb7834db3-ccfc-428d-a539-1afd0f335982%2Fsqhdg7a_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose a bank makes a two-year $20,000 loan with the entire principal amount due in two years at an annual rate of 4.25%. The bank funds
this with a six-month $20,000 CD at a cost of 1.75%. What is the bank's six month static GAP?
O $20,000
O $10.000
O $0
O $10,000
O $20,000
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