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Alex17521 [72]
3 years ago
12

First National Bank of America has more than 75% of its assets in first residential fixed-rate mortgages that mature in more tha

n 5 years. Suppose that a 12-month Gap Analysis predicts a decrease in 2021 interest income of $3 million if there is a sudden 1% drop in market interest rates. From your knowledge of the practical flaws in gap analysis, a realistic simulation analysis would predict that:_______.
1. Interest income will drop by more than $3 million for a sudden 1% drop in market interest rates
2. Interest income will drop by less than $3 million for a sudden 1% drop in market interest rates
Business
1 answer:
iris [78.8K]3 years ago
7 0

Answer:

2. Interest income will drop by less than $3 million for a sudden 1% drop in market interest rates

Explanation:

Since in the question it is mentioned that there is decrease in 2021 interest income of $3 million in the case when there is a sudden decline of 1% in the rate of interest of the market this is due to the convexity of the curve as the GAP analysis and assume straight line

So the option 2 is correct

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Feb. 2 Wrote a $350 check to establish a petty cash fund. 5 Purchased paper for the copier for $14.55 that is immediately used.
Nataly [62]

Answer:(1) Dr: petty cash $350, Cr: Cash $350, (2) Total delivery expense $16, Total Milleage expense $71, Total postage expense $65.55, Total merchandise inventory( Transportation -in) $42.4, Total office supplies $81.32, Petty Cash Balance $204.67 (3) a) Dr : Expenses $326.29, Cr : Cash $326.39 (b) Dr: petty cash $490, Cr: Cash $490

Explanation:

Journal entry to establish the petty cash fund

Dr : petty cash $350

Cr: : Cash $350

Journal entry to record the reimbursement

Dr : Expenses $326.39

Cr: Cash $326.39

Journal entry to record the increase in fund amount

Dr:petty cash $490

Cr: cash $490

Total delivery expenses $16

Total mileage expenses $71

Total postage expenses $65.55

Total merchandise inventory (Transportation -in) $42.4

Total office supplies $81.32

Amount received for reimbursement $326.39

Petty Cash Balance $204.67

7 0
3 years ago
If your lifestyle budget is $50000 a year selecting a career earning $75,000 will most likely allow you to meet your lifestyle g
NARA [144]
From what is said the answer is true. that leaves 25000 over your lifestyle budget
8 0
3 years ago
It is a good idea to prepare for possible layoffs by making sure ______.
Eva8 [605]
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5 0
3 years ago
Read 2 more answers
Explain why each of the following statements is a rationale for conducting active or passive policy: Economic circumstances can
Vladimir79 [104]

Answer:

The rationale for conducting active policy is the interest of Congress to alter the state of the economy through a deliberate change in established policies.

But in the case of Passive policy, the government permits the status quo.

Active policy relies on the government to enforce it while passive policy does not need the government's interference to work in stabilizing the economy.

Explanation:

The following statements applies passive policy because the economy is expected to stabilize on it's own without the deliberate act of congress influencing it:

  • Economic circumstances can change dramatically between the time that an economic downturn begins and the time when policy actions have an effect on the economy.
  • Fluctuations in economic output have been less severe since World War II.

The following statements is a rationale for conducting active policy since the government's intervention is required:

  • Economists are not very accurate forecasters.
  • Increases in government spending generate increases in economic output.
6 0
3 years ago
"A customer has an existing short margin account and wants to write five covered puts against 500 shares of stock that are short
Aleksandr-060686 [28]

Answer: 0

Explanation:

From the question, we are informed that a customer has an existing short margin account and wants to write five covered puts against 500 shares of stock that are short in the account.

Based on the above scenario, the margin requirement to write the puts will be zero. This is due to the fact that there is no risk that is attached to the short calls.

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