Assignment Questions [10 Marks]
What are the different types of risks the banks and other financial institutions are exposed to? [2 Marks]
What are the Asset-Liability Management Strategies? Explain. [2 Marks]
Explain the loanable fund theory of Interest Rate Determination. [2 Marks]
What are the different types of derivatives? Take an example and explain Interest rate swaps. [2 Marks]
Calculate the interest-sensitive GAP (IS GAP) and Relative IS GAP ratio for a financial institution if interest-sensitive assets (ISA) are $100 million and interest-sensitive liabilities (ISL) are $125 million. Is that firm an Asset sensitive? Explain.[2 Marks]