BMGT 445 lecture 3

BMGT 445 lecture 3 - BMGT445 ProfessorEthanCohenCole

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Click to edit Master subtitle style 3/1/11 BMGT 445 Professor Ethan Cohen-Cole Lecture 3
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3/1/11 Key concepts (boring list day) Overview of Major Risk (Chapter 7) IRR Market Credit Off-balance sheet Forex Country Operational
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3/1/11 Back to our example $1 00 $1 00 $1 00 $1 00 $1 00 $250 (payable over 5 years, Fixed rate) $250 (payabl e over 5 All checking accounts
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3/1/11 Balance Sheet Ass ets Liabiliti es $500 6% fixed $500 Libor-2% Scenario 1: Libor = 7%; How much does the bank make each year. (simple interest, no compounding)
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3/1/11 Mismatch in maturities of assets and liabilities. Interest rate sensitivity difference exposes equity to changes in IRR Market Credit Off-balance sheet Forex Country Operational Liquidity Insolvency Others
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3/1/11 Incurred in trading of assets and liabilities (and derivatives). Suppose I own the components of the Dow Jones index IRR Market Credit Off-balance sheet Forex Country Operational Liquidity Insolvency Others
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BMGT 445 lecture 3 - BMGT445 ProfessorEthanCohenCole

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