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The balance sheet of Bayes Bank is represented in the table below. All figures are in millions of US Dollars. Use the information in the table, to answer the question below. Liabilities Assets 3-month Treasury bills 6-month Treasury notes 1-year consumer loans 2-year consumer loans 3.year Treasun hand 1303-month CDs 1353-month bankers acceptances $1506-month commercial paper 1251-year time deposits 1702 ven time 140 120 160 120 40

The balance sheet of Bayes Bank is represented in the table below. All figures are in millions of US Dollars. Use the information in the table, to answer the question below. Liabilities Assets 3-month Treasury bills 6-month Treasury notes 1-year consumer loans 2-year consumer loans 3.year Treasun hand 1303-month CDs 1353-month bankers acceptances $1506-month commercial paper 1251-year time deposits 1702 ven time 140 120 160 120 40

Essentials Of Investments
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
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The balance sheet of Bayes Bank is represented in the table below. All figures are in millions of US Dollars. Use the information in the table, to answer the question below. Liabilities Assets 3-month Treasury bills 6-month Treasury notes 1-year consumer loans 2-year consumer loans 3-year Treasury bond 10-year, fixed-rate mortgages 30-year, floating-rate mortgages (rate adjusted every nine months) Total Assets 1303-month CDs 1353-month bankers acceptances $1506-month commercial paper 1251-year time deposits 1702-year time deposits 120 2-year demand deposits 140 Equity capital $970 Total Liabilities 140 120 O a. The net interest income will go up by 3 O b. The net interest income will go down by 6 O c. The net interest income will go down by 30 O d. The net interest income will go up by 60 160 120 40 170 120 $970 4 The chief risk officer is expecting an interest rate increase of 20% in one year horizon. What is the impact of that increase in the value of net interest income in 1-year horizon?
Transcribed Image Text:The balance sheet of Bayes Bank is represented in the table below. All figures are in millions of US Dollars. Use the information in the table, to answer the question below. Liabilities Assets 3-month Treasury bills 6-month Treasury notes 1-year consumer loans 2-year consumer loans 3-year Treasury bond 10-year, fixed-rate mortgages 30-year, floating-rate mortgages (rate adjusted every nine months) Total Assets 1303-month CDs 1353-month bankers acceptances $1506-month commercial paper 1251-year time deposits 1702-year time deposits 120 2-year demand deposits 140 Equity capital $970 Total Liabilities 140 120 O a. The net interest income will go up by 3 O b. The net interest income will go down by 6 O c. The net interest income will go down by 30 O d. The net interest income will go up by 60 160 120 40 170 120 $970 4 The chief risk officer is expecting an interest rate increase of 20% in one year horizon. What is the impact of that increase in the value of net interest income in 1-year horizon?
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