Question 1) An investment banker agrees to a firm commitment offering of 1.2 million shares of Bally stock. The offer price is set at $25.50 and the spread is 30 cents per share. If the stock is actually sold to the public at $26.00, however, what is the amount of funds Bally receives? (Ignore any other fees or expenses.)
- $31,200,000
- $30,600,000
- $30,240,000
- $29,280,000
- $28,120,000
Question 2) A bank has DA = 2.4 years and DL = 0.9 years. The bank has total equity of $82 million and total assets of $850 million. Interest rates are at 6%.
- If interest rates increase 100 basis points the predicted dollar change in equity value will equal:
$10,171,698
-$10,171,698
$12,724,528
-$12,724,528
$4,928,756
Question 3) The typical duration of a Class B CMO is
- 1.5-3 years
- 3-5 years
- 5-7 years
- 7-10 years
- 18-20 years