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The Average Duration of the Loans Is 10 Years If at the End of the Year,the Exchange Rate Is

Question 111

Multiple Choice

The average duration of the loans is 10 years.The average duration of the deposits is 3 years.  Consumer loans $50 million Deposits $235 million  Commercial Loans $200 million Equity $15 million  Total Assets $250 million Total Liabilities & Equity $250 million \begin{array}{llr}\text { Consumer loans } & \$ 50 \text { million Deposits } & \$ 235 \text { million } \\\text { Commercial Loans } & \$ 200 \text { million Equity } & \$ 15 \text { million } \\\text { Total Assets } & \$ 250 \text { million Total Liabilities \& Equity } & \$ 250 \text { million }\end{array} If at the end of the year,the exchange rate is $1.65/ \le ,what is the spread earned on the loan by the FI in dollars after adjusting fully for exchange rates?


A) -$3,750,000.
B) -$1,250,000.
C) +$1,250,000.
D) +$3,750,000.

Correct Answer:

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