The Harris State Bank has $2,000 in total assets (all of which are earning assets), $500...

The Harris State Bank has $2,000 in total assets (all of which are earning assets), $500 of which will be repriced in the next 90 days. This bank also has $1,600 in total liabilities, $1,000 of which will be repriced in 90 days. The bank currently earns 9 percent on its assets and pays 4 percent on its liabilities.

If interest rates on both assets and liabilities rise by 2 percent in the next 90 days, what would be this bank's net interest margin?

		4.2 percent
		5.3 percent
		5.8 percent
		6.2 percent
		7.8 percent

Expert Solution

jeff jeffy answered 1 year ago

The Tidewater State Bank has $1,000 in total assets (all of which are earning assets), $700...

The Tidewater State Bank has $1,000 in total assets (all of which are earning assets), $700 of which will be repriced within the next 90 days. This bank also has $800 in total liabilities, $400 of which will be repriced within the next 90 days. Currently, the bank is earning 8 percent on its assets and is paying 5 percent on its liabilities. If interest rates on both assets and liabilities decrease by 2 percent in the next 90...

The Harris Corporation currently has the following ratios: Total asset turnover = 1.6 (sales/total assets) Total...

The Harris Corporation currently has the following ratios: Total asset turnover = 1.6 (sales/total assets) Total debt to total assets = .5 Current ratio = 1.7 Current liabilities = $2,000,000 (a) If Hariss's sales are $16,000,000 what is the amount of total assets? (1.6=sales/TA) (b) Of the total in (a) above, what is the amount of current assets? (current ratio = CA/CL=1.7) (c) What is the total debt of the firm? (total debt to assets = total debt/TA from (a))...

Assume that a bank has assets located in Germany worth €360 million earning an average of...

Assume that a bank has assets located in Germany worth €360 million earning an average of 9 percent. It also holds €280 in liabilities and pays an average of 6 percent per year. The current spot rate is €1.50 for $1. If the exchange rate at the end of the year is €2.00 for $1: What is the effect of the exchange rate change on the net interest margin (interest received minus interest paid) in dollars from its foreign assets...

The bank has total assets of 967,151 and total liabilities of 902,027. The shareholder's equity is...

The bank has total assets of 967,151 and total liabilities of 902,027. The shareholder's equity is 65,124. all the amounts are in millions. the debt to equity ratio will be 13.85. so, what does 13.85 mean? This data is taken from a legit bank from its balance sheet but can debt to equity ratio be 13.85 for good banks?

The Bank of Springfield has total reserves of $300, loans of $500 and on the liabilities...

The Bank of Springfield has total reserves of $300, loans of $500 and on the liabilities side demand deposits of $1,000.If the customers write checks for $200 and the required reserve ratio is 20%, then its required reserves fall to?

Monsto has 120$mil in total assets. its basic earning power is 12%, its times interest earned...

Monsto has 120$mil in total assets. its basic earning power is 12%, its times interest earned (TIE) ratio is 6. The tax is 35% What is its ROA?

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 put $500 per month in the bank today earning 6% per year. How much will...

You put $500 per month in the bank today earning 6% per year. How much will be in the account in 5 years if the interest compounds annually? What if it compounds monthly?

Edelman Engines has $18 billion in total assets — of which cash and equivalents total $100...

Edelman Engines has $18 billion in total assets — of which cash and equivalents total $100 million. Its balance sheet shows $2.7 billion in current liabilities — of which the notes payable balance totals $0.82 billion. The firm also has $8.1 billion in long-term debt and $7.2 billion in common equity. It has 600 million shares of common stock outstanding, and its stock price is $22 per share. The firm's EBITDA totals $1.848 billion. Assume the firm's debt is priced...

Edelman Engines has $17 billion in total assets — of which cash and equivalents total $110...

Edelman Engines has $17 billion in total assets — of which cash and equivalents total $110 million. Its balance sheet shows $2.55 billion in current liabilities — of which the notes payable balance totals $1.12 billion. The firm also has $9.35 billion in long-term debt and $5.1 billion in common equity. It has 300 million shares of common stock outstanding, and its stock price is $25 per share. The firm's EBITDA totals $0.9 billion. Assume the firm's debt is priced...

Question