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Veronika [31]
3 years ago
7

A bank has an average duration of its liabilities equal to 2 years. The bank's average duration of its assets is 3.5 years. The

bank's market value of equity is at risk if _______________________.'
Business
1 answer:
Andreas93 [3]3 years ago
6 0

Answer: Interest rate rises

Explanation:

When interest rates rises, or move up cost of borrowing becomes higher and expensive. This results in the demand for lower-yield bonds dropping, which causes their prices to drop.

A decrease in interest rates will always lead to investors moving money from the bond market to the equity market, which results in the rise or influx of new capital. This puts the banks market value of equity at a disadvantage.

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Westwick Inc. is an advertising agency. Its employees are allowed to take decisions and work in ways that will help maximize the
Anna35 [415]

Answer:

<em>C) Organizational plurality </em>

Explanation:

Organizational plurality is a working environment in which all representatives are encouraged to collaborate in a way that promotes the gains for the company, clients and themselves.

As with the advertising agency, the employees are given chances to follow their decisions and maximize their experience.

5 0
3 years ago
(Ignore income taxes in this problem.) The management of Stanforth Corporation is investigating automating a process. Old equipm
solniwko [45]

The simple rate of return on the investment is closest to: <u>34.5%</u>

<u>Explanation</u>:

<em><u>Given</u></em>:

Current salvage value = $15,000

Cost of new machine = $408,000

Cash operating cost = $141,000

Simple Return on Investment is Calculated as follows:-

Simple rate of return on the investment = Net Operating Cost Saved/ Initial Investment X 100

So Simple Return = 141000/408000 X 100

= 34.5%

The simple rate of return on the investment is closest to: 34.5%

3 0
4 years ago
_____, as a conflict management strategy, is the political equivalent of "win some, lose some" and is possible in a long-term re
Lady bird [3.3K]

Answer:

compromising

Explanation:

Compromising—when you compromise or “split the difference” in a conflict which is the political equivalent of "win some, lose some" and is possible in a long-term relationship where there is time for give-and-take exchange.

5 0
3 years ago
You have $100 you have $100 to invest. If you can earn 12% interest, about how long does it take for your $100 investment to gro
Ann [662]

Answer:

8.33333 years ;

Yes, the time doubles.

Explanation:

Investment amount = principal = $100

Interest rate, r = 12%

Time taken for investment to grow to $200

Using the simple interest formula :

A = P(1 + rt) ; t = time taken ; A = final amount = $200

200 = 100(1 + 0.12t)

200 = 100 + 12t

200 - 100 = 12t

100 = 12t

t = 100 / 12

t = 8.333 years

Time taken, if rate, r = 6%

200 = 100(1 + 0.06t)

200 = 100 + 6t

200 - 100 = 6t

100 = 6t

t = 100 / 6

t = 16.6666 years

6 0
3 years ago
An interest rate swap has 3 years of remaining life. Payments are exchanged annually. Interest at 3% is paid and 12-month LIBOR
noname [10]

Answer:

2.66% of the principal.

Explanation:

Suppose the principal 100.

The value of the floating rate bond underlying the swap is 100.

The value of the fixed rate bond is 3/1.02 + 3/(1.03)^2 + 103/(1.04)^3 = 97.34.

The value of the swap is therefore 100−97.34 = 2.66 or 2.66% of the principal.

6 0
3 years ago
Read 2 more answers
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