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Artemon [7]
2 years ago
11

A bank has $50 million in assets, $47 million in liabilities and $3 million in shareholders' equity. If the duration of its liab

ilities are 1.3 and the bank wants to immunize its net worth against interest rate risk and thus set the duration of equity equal to zero, it should select assets with an average duration of _________.
Business
1 answer:
Alisiya [41]2 years ago
5 0

Answer: 1.222

Explanation:

The Average duration can be derived from the formula:

Assets * Average Duration = Liabilities * Duration of Liabilities

Average Duration = (Liabilities * Duration of Liabilities) / Assets

= (47,000,000 * 1.3) / 50,000,000

= 61,100,000 / 50,000,000

= 1.222

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On June 8, Alton Co. issued an $88,500, 7%, 120-day note payable to Seller Co. Assume that the fiscal year of Seller Co. ends Ju
Furkat [3]

Answer:

Amount of interest revenue recognized =\frac{2065\times 98}{120}=$1686.41

Explanation:

Principal amount P = $88500

Rate of interest r = 7 %

Total number of days = 120

So interest =\frac{principal\ amount\times rate\times time}{100}=\frac{88500\times 7\times 120}{360\times 100}=$2065

Number of days from 8 june to 30 june = 30-8 = 22 days

So left days = 120-22 = 98 days

So amount of interest revenue recognized =\frac{2065\times 98}{120}=$1686.41

3 0
3 years ago
Which of the following statements is not accurate descriptions of the business market? Mrs. Phillip, a retail buyer for Blooming
Natali [406]

Answer:

Mrs. Phillip, a retail buyer for Bloomingdale's, does all the shopping for her family at the same store.

Explanation:

The business market is the market where you can sell your product and services to the other businesses so it can be used as a raw material for the other business in order to manufacture the products. And, the other reason is to purchased the products and resell them.

So based on the given statements, the first option is considered as in the remaining statements there are business transactions but in this only one person i.e. retail buyer is considered

8 0
2 years ago
Select the correct answer. Which definition refers to visual merchandising? A. the art of presenting merchandise in a creative w
WITCHER [35]

Answer:

A

Explanation:

the art of presenting merchandise in a creative way that helps the store reach out to people

(if its not a, then its d)

6 0
2 years ago
Read 2 more answers
Economic models
Fiesta28 [93]

Answer:

D.

Explanation:

A economic model can be used to explain or predict economic phenomena, because every model has to have key variables that command the economic decisions and operations.

An economic model is define to get a specific goal, so when some problem comes, you can study every decision based on the model applied, that 'simplifies' solutions, or even better, you must be able to predict when economic problems will arrive.

7 0
2 years ago
Molly is a 30% partner in the MAP Partnership. During the current tax year, the partnership reported ordinary income of $200,000
loris [4]

Answer:

The answer is: C) $62,000

Explanation:

The partnership had a total ordinary income of $200,000. It made guaranteed payments to its three partners (Molly, Amber and Pat) of $20,000 each ($60,000 in total).

So the partnership adjusted income is reduced to $140,000, out of that amount, 30% belongs to Molly. Molly's share of the partnership adjusted income is $42,000.

Molly's total earnings from the partnership are $62,000 ($20,000 + $42,000)

8 0
3 years ago
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