1- To what different kinds of risk are banks and their financial-service competitors subjected today?
2- What forces cause interest rates to change? What kinds of risk do financial firms face when interest rates change?
3- What is the yield curve, and why is it important to know about its shape or slope?
4- A bank reports that the total amount of its net loans and leases outstanding is $936 million, its assets total $1,324 million, its equity capital amounts to $110 million, and it holds $1,150 million in deposits, all expressed in book value. The estimated market values of the bank’s total assets and equity capital are $1,443 million and $130 million, respectively. The bank’s stock is currently valued at $60 per share with annual per-share earnings of $2.50. Uninsured deposits amount to $243 million and money-market borrowings total $132 million, while nonperforming loans currently amount to $43 million and the bank just charged off $21 million in loans.
Calculate risk measures as you can from the foregoing data.
Liquidity Risk, Interest Rate Risk, Capital Risk, Credit Risk, Price Risk
reference : apa style
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