A commercial bank recognizes that its net income suffers whenever interest rates increase. Which of the following strategies would protect the bank against rising interest rates?
A. Entering into an interest rate swap where the bank receives a fixed payment stream, and in return agrees to make payments that float with market interest rates.
B. Purchase principal only (PO) strips that decline in value whenever interest rates rise.
C. Enter into a short hedge where the bank agrees to sell interest rate futures.
D. Sell some of the bank's floating-rate loans and use the proceeds to make fixed-rate loans.
E. Buying inverse floaters.
Answer: C
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Las Palmas Company reported the following items on its financial statements for the year ending December 31, 2016: Sales $ 560,000 Cost of goods sold $400,000 Salary expense 40,000 Interest expense 30,000 Dividends 30,000 Income tax expense 25,000 How much will be reported as retained earnings on Las Palmas' balance sheet at December 31, 2016, if this is the first year of operations?
a. $ 45,000 b. $ 35,000 c. $ 85,000 d. Not enough information is provided.
A good ability-to-job fit can help maintain, or improve:
A. employee motivation. B. job satisfaction. C. productivity. D. All statements are correct. E. All statements are incorrect.
A depository institution that is owned by its depositors, who are often members of a common organization or association, such as an occupation, a religious group, or a community, is called a(an) _____.
A. underwriting syndicate B. mutual fund C. investment bank D. credit union E. commercial bank
When using the effective-interest amortization method, the amount of the interest expense is calculated using the face value of the bonds and the stated interest rate
Indicate whether the statement is true or false