(2.)Suppose the First National Bank of Duluth has $500.00 million in total assets with an average...

(2.)Suppose the First National Bank of Duluth has $500.00 million in total assets with an average asset duration offive years. Assume that the bank’s liabilities are comprisedof $86.75 million of demand deposits and $163.75 million inbonds with a 4.00% coupon rate (which pays annually) and a fiveyear time-to-maturity. Further assume that currentmarket interest rates are at 9.00% per annum.

(a.)(2 point) Calculate the duration of the bank’s bonds.

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Suppose the First National Bank of Austin has $500.00 million in total assets with an average...

Suppose the First National Bank of Austin has $500.00 million in total assets with an average asset duration of five years. Assume that the bank’s liabilities are comprised of $86.75 million of demand deposits and $163.75 million in bonds with a 4.00% coupon rate (which pays annually) and a five year time-to-maturity. Further assume that current market interest rates are at 9.00% per annum. Show work. (a.) Calculate the duration of the bank’s bonds. (b.) What is this bank’s duration...

You are the employed by the First National Bank. This bank has $5 million in capital....

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You are the employed by the First National Bank. This bank has $5 million in capital....

You are the employed by the First National Bank. This bank has $5 million in capital. They have $100 in checkable deposits. Of that they keep only the 10% required reserves and loan the rest out. In $45 million in business loans and $50 million in residential mortgages. How well capitalized is First National Bank? Calculate the risk weighted level of assets and risk weighted leverage ratio. Why are leverage (capital) ratios important for financial regulators and institutions?

Suppose a bank has $100 million in assets, and $90 million in liabilities. If assets increase...

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First National Bank Balance sheet Assets &

First National Bank Balance sheet Assets Liabilities Rate-sensitive $20 million $50 million Fixed-rate $80 million $50 million 4) Given the above table and assuming that the average duration of its assets is four years, while the average duration of its liabilities is three years, then a 5 percentage point increase in interest rates will cause the net worth of First National to ________ (increase/decline) by ________ (5% /10%/ 15%/ 20%) of the total original asset value (use...

Following the above balance sheet, suppose the assets of the First National Bank increases by 4%,...

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2. The Burger Hut has sales of $29 million, total assets of $43 million, and total...

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2. The Burger Hut has sales of $29 million, total assets of $43 million, and total...

2. The Burger Hut has sales of $29 million, total assets of $43 million, and total debt of $13 million. The profit margin is 11 percent. What is the return on equity? 3. Gladstone Pavers has a long-term debt ratio of 0.6 and a current ratio of 1.3. Current liabilities are $700, sales are $4,440, the profit margin is 9.5 percent, and the return on equity is 19.5 percent. How much does the firm have in net fixed assets?

Suppose that assets of the First Bank consist of reserves held in cash and it has...

Suppose that assets of the First Bank consist of reserves held in cash and it has enough to meet the reserve requirement; long term loans the First Bank made in the past were to reliable borrowers and should eventually be repaid in the future, and low risk long-term U.S. Government bonds. Is it correct to say that since the First Bank has invested its assets wisely, the bank will be fine if there is a run on all banks and...

Question 2 Bank Reconciliation The Duluth Manufacturing Company has a business chequing account at the Bank...

Question 2 Bank Reconciliation The Duluth Manufacturing Company has a business chequing account at the Bank of Ontario. The bank provides a bank statement and cancelled cheques once a month. The cut-off date is the last day of the month. The bank statement for the month of May is summarized as follows: Balance, May 1, 2016 $32,120 Deposits 82,140 Cheques processed (78,433) Service charges (80) NSF cheque from customer (2,187) Note...

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(2.)Suppose the First National Bank of Duluth has $500.00 million in total assets with an average...

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