Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. calgary bank and trust has $100 million in assets

Calgary Bank and Trust has $100 million in assets and $83 million in liabilities. The...

60.1K

Verified Solution

Question

Finance

image

Calgary Bank and Trust has $100 million in assets and $83 million in liabilities. The duration of the assets is 5.4 years, and the duration of the liabilities is 1.6 years. How many futures contracts does this bank need to fully hedge itself against interest-rate risk? The available Canada bond futures contracts have a duration of 10 years, have a face value of $1,000,000, and are selling for $972,000. The bank needs to purchase futures contracts to fully hedge itself against interest-rate risk. (Round up to the nearest whole number.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

wesltley widgets, Inc produces and sells a unique type ofwidget. The company has just...

Accounting
Q

Let A be a square matrix defined by \( A =\begin{pmatrix}-8&-3&-6\\ 4&0&4\\ 4&2&2\end{pmatrix} \) (a) Find...

Advance Math
Q

Which category of sport is notat high risk for eating disorders? a. appearance-conscious sports b. endurance sports c. weight-classification...

Medical Sciences
Q

Assignment Purpose The purpose of this lab is to write a well commented java program that demonstrates...

Programming
Q

Suppose that the service time at a store with only, one check-out counter is Exponentially distributed,...

Statistics
Q

Detail one instance in which regression analysis can be used in a business application. Explain what...

Basic Math
Q

Largest and smallest distance of a satellite from center of planet are given by Rmax...

Physics
Q

\table[[Common stock, $1 par, 244,000 shares issued,$244,000 Wrong answer for excess of par...

Accounting
Q

Royal pty ltd sells all kits products on account . Royabal has the following account...

Accounting
Q

The following information relates to production activities of Mercer Manufacturing for the year. Actual direct...

Accounting
Q

On 1 July 2019 Blue Ltd acquired 100% of the share capital (ex. div.) of...

Accounting
Q

The sales budget is the starting point for the master budget. Discuss how it is...

Accounting