All categories

3 years ago

(TCO E & F) A bank is facing a forecast of rising interest rates. How should they set the repricing and duration gap?

Business

1 answer:

Aleonysh [2.5K]3 years ago

5 0

Answer:

The repricing and duration gap can be set likely by :

A. Positive repricing gap and negative duration gap

Explanation:

Here, we can see the mentioned topic is

The forecasting of rising interest rates. So, the bank is facing this issue then they will have to set the values as :

A. Positive repricing gap and negative duration gap

Forecasting of rising interest rates: It is a very tough thing to do. In financial analysis this is one the hardest assumptions that have to be made.

Its prediction in financial analysis is very complicated. This results in the rates to a lower value which results in money of the bank to outflow.

As by forbes for this year it had been predicted that it would not be rising interest rates in 2020.

Even that the growth of economy will be very low and all will be worrying about the inflation.

A high recession will be noticed by us.

This will results in money lending rates to be quite too high.

You might be interested in

Assume that the yen/dollar exchange rate quoted in London at 3:00 p.m. is ×120 = $1, and the New York yen/dollar exchange rate a

Viefleur [7K]

Answer:

This question lacks answers

A. currency swap.

B. arbitrage.

C. backwardation.

D. straddle.

The answer is b.

Explanation:

Arbitrage is a common practice used to gain profits from inefficient markets. Since most financial markets are inefficient by nature, dealers and similar business entities that have an interest in this kind of business practice.

The profit in arbitrage is based on the imbalance in the two prices on each market respectively. The term is mainly used for financial markets and various financial instruments (securities, bonds, currencies).

In the example above, the dealer becomes an arbitrageur by making a profit from the difference in the yen/dollar exchange rate in two markets (NY and London.)

8 0

3 years ago

During fiscal year-end 2016, Kohl’s Corporation reports the following (in $ millions): net income of $556, retained earnings at

nikitadnepr [17]

Answer:

c. $363 million

Explanation:

We can compute this easily by making a retained earning extract from the balance sheet at the closing date,

Opening Retained earnings $12,329

Add retained earnings for the year $556

Less: Dividends paid $363

Closing Retained earnings $12,522

Reverse calculating the information gives us c. $363 million

Hope that helps.

7 0

3 years ago

Mickey and Jenny Porter file a joint tax return, and they itemize deductions. The Porters incur $2,000 in investment expenses. T

Reil [10]

Answer:

Please check the following explanation

Explanation:

Capital losses are not included in the calculation of net investment income. Therefore, $2,000 long-term capital loss would have no effect on investment income. Thus, Porters' investment income will remain $2,500.

Consequently, Porters' can deduct $2,500 of the investment interest expense and the remaining $500 of investment interest expense will be carried over to next year.

4 0

3 years ago

A production possibilities frontier identifies the dollar cost of producing a good or service in an economy. True or False

belka [17]

Answer:

A production possibilities frontier identifies the dollar cost of producing a good or service in an economy.

True

Explanation:

Cost of producing could be envisaged through budgeting where the variable cost, fixed cost and total cost is expected to be calculated either through rough estimate.

3 0

3 years ago

According to equity theory, in order to restore equity or fairness of a work situation a worker may ______. (select all that app

noname [10]

Group of answer choices.

A. try to have the inputs of coworkers increased

B. try to increase the outputs of coworkers

C. try to increase his or her own outputs

D. try to increase his or her own inputs

Answer:

A. try to have the inputs of coworkers increased.

C. try to increase his or her own outputs.

Explanation:

Adam Smith was a Scottish political economist, social and moral philosopher, author and he is famously considered to be the father of modern economics. Smith was born on the 5th of June, 1723 in Kirkcaldy, United Kingdom and he died on the 17th of July, 1790 in Panmure House, Edinburgh, United Kingdom.

The equity theory by Adam Smith helps to measure and strike a balance between the work input and output of a worker.

An equality norm can be defined as a reward system in which the employer or human resource manager decide to compensate or pay the entire workforce the same amount of money without discrimination or favoritism.

Basically, it's paid regardless of individual productivity levels, in order to promote the ability to work effectively in groups.

According to equity theory, in order to restore equity or fairness of a work situation a worker may;

I. Try to have the inputs of coworkers increased.

II. Try to increase his or her own outputs.

8 0

3 years ago