The average duration of the loans is 10 years.The average duration of the deposits is 3 years. $\begin{array}{llr}
\text { Consumer loans } & \$ 50 \text { million Deposits } & \$ 235 \text { million } \
\text { Commercial Loans } & \$ 200 \text { million Equity } & \$ 15 \text { million } \
\text { Total Assets } & \$ 250 \text { million Total Liabilities \& Equity } & \$ 250 \text { million }
\end{array}$
What is the cash spread earned by the FI if at the end of the year the $\le$ is trading at $1.63/$\le$ in the cash market? Again adjust for all exchange rate changes.
A)$1,610,000 gain.
B)$1,610,000 loss.
C)$2,670,000 loss.
D)$2,670,000 gain.

Question

The average duration of the loans is 10 years.The average duration of the deposits is 3 years. $\begin{array}{llr}
\text { Consumer loans } & \$ 50 \text { million Deposits } & \$ 235 \text { million } \
\text { Commercial Loans } & \$ 200 \text { million Equity } & \$ 15 \text { million } \
\text { Total Assets } & \$ 250 \text { million Total Liabilities \& Equity } & \$ 250 \text { million }
\end{array}$
 What is the cash spread earned by the FI if at the end of the year the $\le$ is trading at $1.63/$\le$ in the cash market? Again adjust for all exchange rate changes.
A)$1,610,000 gain.
B)$1,610,000 loss.
C)$2,670,000 loss.
D)$2,670,000 gain.

Quizplus · Accepted Answer

The Answer of The average duration of the loans is 10 years.The average duration of the deposits is 3 years. $\begin{array}{llr}
\text { Consumer loans } & \$ 50 \text { million Deposits } & \$ 235 \text { million } \
\text { Commercial Loans } & \$ 200 \text { million Equity } & \$ 15 \text { million } \
\text { Total Assets } & \$ 250 \text { million Total Liabilities \& Equity } & \$ 250 \text { million }
\end{array}$
 What is the cash spread earned by the FI if at the end of the year the $\le$ is trading at $1.63/$\le$ in the cash market? Again adjust for all exchange rate changes.
A)$1,610,000 gain.
B)$1,610,000 loss.
C)$2,670,000 loss.
D)$2,670,000 gain.

The Average Duration of the Loans Is 10 Years What Is the Cash Spread Earned by the FI If