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Free_Kalibri [48]
3 years ago
14

If Second National Bank has more rate-sensitive liabilities than rate-sensitive assets, it can reduce interest-rate risk with a

swap which requires Second National to_____________.
Business
1 answer:
Contact [7]3 years ago
3 0

Answer: Pay fixed rate while receiving floating rate.

     

Explanation:

  According to the given question, If the second national bank contain more rate of liabilities as compared to the rate of asset in any organization then it basically reducing the risk of the interest rate by using the technique swapping with paying some fixed amount of rate at the time of receiving the floating rate.

The process of fixed to floating swap is one of the contractual process between any two types of companies or members so that they can swap their cash flow system.  

 Therefore, The given answer is correct.  

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Suppose an Exxon Corporation bond will pay $4,500 ten years from now. If the going interest rate on safe 10-year bonds is 4.25%,
Luda [366]

Answer:

The answer is a. $2,967.92

Explanation:

Calculation of prent value

Present value = p* (1+i)^-10

Present value = $4,500 * (1+0.0425)^-10= <u>$2,967.92</u>

4 0
3 years ago
Justin, a real estate salesperson, would like to offer his colleague a referral fee for referring him a new client. before offer
MrMuchimi
Justin<span> obtained informed consent from the client in order to follow the full disclosure policy. In this policy, referral fee can only be given with the informed consent of the client (this is the party being referred by the </span>referrer<span>). The informed consent should be in writing in order to avoid complications in the future.</span>
8 0
3 years ago
Red when choosing a form of ownership
siniylev [52]

Answer:

see below

Explanation:

1. Private Limited Company

A private limited company is an acknowledged legal entity whose shares are held privately by the founders. The shareholders are the owners. They are not allowed to trade their shares to the public through the security exchange. SHINING STAR BUS COMPANY (PTY) Ltd is currently a limited private company.  Transfer of shares has to be between the existing shareholders, the bus company, and requires authorization. The shareholders have limited liability to the company's debts and are entitled to a share in the company profits.

2. Public Limited Company

A public limited company is recognized as a legal and separate entity from its owners. Unlike a private limited company, the shares of a public limited company are traded in the security exchange markets. It means ownership of a public company is open to the public. The management of SHINING STAR BUS COMPANY (PTY) Ltd wants to convert it to a public limited company. After the conversion, its shares will be traded at the Johannesburg Security Exchange(JSE).

4 0
3 years ago
Jordan plans to add a porch to her house. The new 16' 18' porch will cost an average of $27 por square foot. Jorden also plans t
tatiyna

Question is incomplete as the cost of the sidewalk is not given :

Assume the sidewalk cost an additional $6 per foot. ​

Answer:

$8366

Explanation:

Given that :

Size of porch = 16 by 18 feets

Area of porch = (16 * 18) = 288 ft²

Cost per ft² = $27

Cost of porch = ($27 * 288) = $7,776

Sidewalk = 15feets

Cost per foot = $6

Cost of sidewalk = ($6 * 15) = $90

Cost of gate = $500

Total cost :

(cost of porch area + side walk + gate)

($7776 + $90 + $500) = $8366

Kindly note that the cost pwr foot of sidewalk was erroneously excluded and the value employed for the cost was only assumed.

7 0
3 years ago
urk Manufacturing is considering purchasing two machines. Each machine costs $9,000 and will produce cash flows as follows: End
Brums [2.3K]

Answer:

Turk should purchase Machine B

Explanation:

<u>Our first step</u> will be to multiply each cashflow by the factor.

Then we will add them to get the present value of the cash flow

\left[\begin{array}{cccc}-&A&factor&Present \: Value\\Year \: 1&5,000&0.8696&4,348\\Year \: 2&4,000&0.7561&3,024.4\\Year \: 3&2,000&0.6567&1,313.4\\Total&11000&-&8,685.8\\\end{array}\right]

Then we subtract the machine cost:

8,685.8 - 9,000 = -314.2 This Machine has a negative value. It is not convinient to purchase this machine.

\left[\begin{array}{cccc}-&B&factor&Present \: Value\\Year \: 1&1,000&0.8696&869.6\\Year \: 2&2,000&0.7561&1,512.2\\Year \: 3&11,000&0.6567&7,223.7\\Total&14,000&-&9,605.5\\\end{array}\right]

9,605.5 - 9,000 = 605.5 This machine NPV is positive it is convient.

7 0
3 years ago
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