Question Details

Answered: - MGT411 (Money & Banking) Question # 01 How banks borrow by using


MGT411 (Money & Banking)

Question # 01

How banks borrow by using a repurchase agreement which is a short term collateralized loan? Discuss with example.

(Marks 03)

Question # 02

Following table shows the bank?s balance sheet of interest rate sensitive and non-sensitive assets & liabilities.

The impact of an interest rate increase on bank profits ( per $400 of assets)

Assets

Liabilities

Interest rate sensitive

$80

$200

Not interest rate sensitive

$320

$200

Initial interest rate

5%

3%

New increased interest rate

6%

4%

  • Find the following from this table:
  • Return from assets at initial interest rate
  • Return from assets at new increased interest rate
  • Cost of liabilities at initial interest rate
  • Cost of liabilities at new increased interest rate
  • Profits at initial interest rate
  • Profits after an increase in interest rate
  • Gap between interest rate sensitive assets and interest rate sensitive liabilities

Arrangement:

 

Repurchase assertion:

 


 


 

Banks can likewise obtain by utilizing a repurchase understanding or repo, which is a fleeting

 

collateralized credit

 


 


 


 

A security is traded for money, with the...

 


Solution details:

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Oct 07, 2020

EXPERT

Tutor

ANSWER RATING

GET INSTANT HELP/h4>

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.

Order Now