Answer:
Answer: Annual Profit for Bank = $1000000
if all interest rates were to rise by 1 percent? there shall be no effect on Profits.
Explanation:
The bank faces the risk that the short-term interest rate will increase (Rise) before the second year, this will increase the amount of interest the bank has to pay on the CD but there will be no changes in the interest income that the bank receives from the Treasury.
2.
Annual income of bank = Annual interest on Treasury note = $50000000 * 4% = $2000000
Annual expense of bank = Annual interest on CD= $50000000 * 2% = $1000000
Annual Profit for Bank = $2000000 - $1000000 = $1000000
3. If all interest rate rises by 1% then:
Annual income of bank = Annual interest on Treasury note = $50000000 * 5% = $2500000
Annual expense of bank = Annual interest on CD= $50000000 * 3% = $1500000
Annual Profit for Bank = $2500000 - $1500000 = $1000000
Hence, there shall be no effect on Profits.
Answer:
receive less funding if they represent the riskiest operations of the firm
Explanation:
In simple words, the cost of capital is represented as weighted average and its represents the level or return expected by the investors and represents the level of risk of the firm on average. Therefore, managers tends to lift up or down this return depending upon the risk of the potential project to be taken.
Thus, if the average return will be applied for all projects then high risk projects will get less funding and low risk project will get excess funding.
The correct answer would be the overview. It is because in order for potential investors to accept the business plan, it is always best to provide a better and more understandable overview in which it will provide them the information they needed and as to why they should sign the contract with you or how can they accept the business plan.
2, 3, and 4 are the answers. <3
