Loyola Bank classifies its assets and liabilities and the period (maturity buckets)within which they are subject to repricing as on March 31,2015 as follows: $\begin{array} { l c c } \text { (dollars in millions) } & \text { Interest-sensitive } & \text { Interest-sensitive } \\ \text { Maturity buckets } & \text { assets } & \text { liabilities } \\ \text { One week } & \$ 50 & \$ 45 \\ 8 \text { to 25 days } & 75 & 70 \\ 25 \text { to } 40 \text { days } & 60 & 75 \\ 40 \text { to } 60 \text { days } & 70 & 80 \\ 60 \text { to } 90 \text { days } & 80 & 70 \\ 90 \text { to } 180 \text { days } & 180 & 160 \\ 180 \text { to } 365 \text { days } & 210 & 190 \end{array}$ What is the interest-sensitivity ratio of the bank for the 90 to 180 days maturity bucket?

A) 0.82 B) 0.88 C) 0.91 D) 0.92 E) 0.85 A) 0.82 B) 0.88 C) 0.91 D) 0.92 E) 0.85

Exam 7: Risk Management for Changing Interest Rates: Asset-Liability Management and Duration Techniques

Explore all topics

If interest rates on both assets and liabilities fall by 2 percent in the next 90 days,what should happen to this bank's net interest margin?

(Multiple Choice)

5.0/5

(37)

Question 141

The Raymond Burr National Bank has $1,000 in assets with an average duration of 5 years.This bank has $800 in liabilities with an average duration of 6.25 years.What is the duration gap of this bank?

(Multiple Choice)

4.8/5

(37)

Question 142

A bank has an average asset duration of 5 years and an average liability duration of 3 years.This bank has total assets of $500 million and total liabilities of $250 million.Currently,market interest rates are 10 percent.If interest rates fall by 2 percent (to 8 percent),what is this bank's change in net worth?

(Multiple Choice)

4.8/5

(45)

Question 143

Which of the following statements concerning a bank's leverage-adjusted duration gap is true?

(Multiple Choice)

4.8/5

(27)

Question 144

One part of interest-rate risk is ____________________.This part of interest-rate risk reflects that as interest rates fall,any cash flows that are received are invested at a lower interest rate.

(Short Answer)

4.7/5

(32)

Question 145

The duration of a bond is the weighted average maturity of the future cash flows expected to be received on a bond.Which of the following statements concerning duration is true?

(Multiple Choice)

4.9/5

(37)

Question 146

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

(Multiple Choice)

4.9/5

(34)

Question 147

Interest-sensitive gap,relative interest-sensitive gap,and the interest-sensitivity ratio will often reach different conclusions as to whether the bank is asset or liability sensitive.

(True/False)

4.8/5

(31)

Question 148

Loyola Bank classifies its assets and liabilities and the period (maturity buckets)within which they are subject to repricing as on March 31,2015 as follows: (dollars in millions) Interest-sensitive Interest-sensitive Maturity buckets assets liabilities One week \ 50 \ 45 8 to 25 days 75 70 25 to 40 days 60 75 40 to 60 days 70 80 60 to 90 days 80 70 90 to 180 days 180 160 180 to 365 days 210 190 What is the interest-sensitivity ratio of the bank for the 90 to 180 days maturity bucket?

(Multiple Choice)

4.7/5

(50)

Question 149

A bank has Federal funds totaling $25 million with an interest-rate sensitivity weight of 1.0.This bank also has loans of $105 million and investments of $65 million with interest rate sensitivity weights of 1.40 and 1.15 respectively.It also has $135 million in interest-bearing deposits with an interest rate sensitivity weight of 0.90 and other money market borrowings of $75 million with an interest rate sensitivity weight of 1.0.What is the weighted interest-sensitive gap for this bank?

(Multiple Choice)

4.7/5

(31)

Question 150

A financial institution is liability sensitive,if its interest-sensitive liabilities are less than its interest-sensitive assets.

(True/False)

4.8/5

(38)

Question 151

A(n)__________________________ gap means that for a parallel increase in all interest rates,the market value of net worth will tend to decline.

(Short Answer)

4.9/5

(34)

Question 152

A bank's IS GAP is defined as:

(Multiple Choice)

4.7/5

(41)

Question 153

Repriceable liabilities include long-term savings and retirement accounts.

(True/False)

4.8/5

(35)

Question 154

If interest rates on both assets and liabilities decrease by 2 percent in the next 90 days,what should happen to this bank's net interest margin?

(Multiple Choice)

4.8/5

(41)

Question 155

Showing 141 - 155 of 155

If interest rates on both assets and liabilities fall by 2 percent in the next 90 days,what should happen to this bank's net interest margin?

The Raymond Burr National Bank has $1,000 in assets with an average duration of 5 years.This bank has $800 in liabilities with an average duration of 6.25 years.What is the duration gap of this bank?

Which of the following statements concerning a bank's leverage-adjusted duration gap is true?

One part of interest-rate risk is ____________________.This part of interest-rate risk reflects that as interest rates fall,any cash flows that are received are invested at a lower interest rate.

The duration of a bond is the weighted average maturity of the future cash flows expected to be received on a bond.Which of the following statements concerning duration is true?

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

Interest-sensitive gap,relative interest-sensitive gap,and the interest-sensitivity ratio will often reach different conclusions as to whether the bank is asset or liability sensitive.

A financial institution is liability sensitive,if its interest-sensitive liabilities are less than its interest-sensitive assets.

A(n)__________________________ gap means that for a parallel increase in all interest rates,the market value of net worth will tend to decline.

A bank's IS GAP is defined as:

Repriceable liabilities include long-term savings and retirement accounts.

If interest rates on both assets and liabilities decrease by 2 percent in the next 90 days,what should happen to this bank's net interest margin?

An Overview of the Changing Financial-Services Sector

The Impact of Government Policy and Regulation on the Financial-Services Industry

The Organization and Structure of Banking and the Financial-Services Industry

Establishing New Banks, Branches, ATMs, Telephone Services, and Websites

The Financial Statements of Banks and Their Principal Competitors

Measuring and Evaluating the Performance of Banks and Their Principal Competitors

Investment Banking,Insurance,and Other Sources of Fee Income

Risk Management: Asset-Backed Securities, Loan Sales, Credit Standbys, and Credit Derivatives

The Investment Function in Financial-Services Management

Liquidity and Reserves Management: Strategies and Policies

Managing and Pricing Deposit Services

Managing Nondeposit Liabilities

Investment Banking, insurance, and Other Sources of Fee Income

The Management of Capital

Lending Policies and Procedures: Managing Credit Risk

Lending to Business Firms and Pricing Business Loans

Consumer Loans, Credit Cards, and Real Estate Lending

Acquisitions and Mergers in Financial-Services Management

International Banking and the Future of Banking and Financial Services

Filters