70.2K

Verified Solution

Link Copied!

please fast anawer

C. Assume sa se cument market rate is 6% The bank has a one-year debt with a spread of 2.5% shave the market rate. The debt rate is fived for spe period and is reset after, when it is rolled over for matching the longer maturity of a The Beans have a maturity of three years and a centractul fired sue of 10.5%. The NII is immune to interest rate changes for the first year only, mit is staan rate for the second and third years Grende flowing formation below Assets Liabilities Amient 2700 1,700 10.5% Fixed rate 85% 3 years 1 year Theresees and costs att(using balances as of t-1) Revenues Cests NII 1) Calculate the Encic Value (EV). 5 points) 2 Based on yce calculations explain the Sensitivity of economic value to interest rates. points) C. Assume sa se cument market rate is 6% The bank has a one-year debt with a spread of 2.5% shave the market rate. The debt rate is fived for spe period and is reset after, when it is rolled over for matching the longer maturity of a The Beans have a maturity of three years and a centractul fired sue of 10.5%. The NII is immune to interest rate changes for the first year only, mit is staan rate for the second and third years Grende flowing formation below Assets Liabilities Amient 2700 1,700 10.5% Fixed rate 85% 3 years 1 year Theresees and costs att(using balances as of t-1) Revenues Cests NII 1) Calculate the Encic Value (EV). 5 points) 2 Based on yce calculations explain the Sensitivity of economic value to interest rates. points)

Answer & Explanation Solved by verified expert

See Answer