Investment Portfolio for a Hypothetical Bank Current Date:September 30,2002 Annual Purchase Book Coupon Market Date Value Description Income Value $4,000,000 par value U.S. 12/15/90 $4,000,000 Treasury note at 11%,due S440,000 $4,099,000 11/15/03 $2,000,000 par value 10/15/90 2,000,000 Federal National Mortgage Association bonds at 175,000 1,824,000 8.75%,due10/15/10 S500,000 par value 6/16/94 500,000 Allegheny County,PA,A- rated general obligations at 25,750 482,500 5.15%,due3//06 $1,000,000 par value State 10//89 1,000,000 of Illinois Aaa-rated general obligations at 11%, 110,000 1,190,000 due10/1/14 麓行贺影≠考
Investment Portfolio for a Investment Portfolio for a Hypothetical Bank Hypothetical Bank C urrent D a t e: September 30, 2002 P urchase Da t e Bo o k Value D escrip tion Annual Coupon Income Market Va l u e 12/15/90 $4,000,000 $4,000,000 p ar val u e U.S. Treas ury note at 11%, due 11/15/03 $440,000 $4,099,000 10/15/90 2,000,000 $2,000,000 p ar val u e Federal National M ortgage Associa tion bonds a t 8.75%, d ue 10/15/10 175,000 1,824,000 6/6/94 500,000 $500,000 p ar val u e Allegheny County, PA, Arated general ob l igati o n s at 5.15%, d ue 3/ l /06 25,750 482,500 10/ l /89 1,000,000 $1,000,000 p ar val u e S tate o f Illinois Aa a -ra t ed general ob l igati o n s at 11%, d u e 10/1/14 110,000 1,190,000
Yield To be attractive,investment securities must pay a reasonable return for the risks assumed. The return may come in the form of price appreciation or periodic coupon interest. 行贺影小号
Yield To be attractive, investment securities must pay a reasonable return for the risks assumed. The return may come in the form of price appreciation or periodic coupon interest
Diversify credit risk The diversification objective is closely linked to the safety objective and difficulties that banks have with diversifying their loan portfolios. Too often,particularly at small banks, loans are concentrated in one industry such as agriculture,energy, or real estate that reflects the specific economic conditions of the region. 麓行贺影≠考
Diversify credit risk Diversify credit risk The diversification objective is closely linked to the safety objective and difficulties that banks have with diversifying their loan portfolios. Too often, particularly at small banks, loans are concentrated in one industry such as agriculture, energy, or real estate that reflects the specific economic conditions of the region
Help manage interest rate risk exposure QInvestment securities are very flexible instruments for managing a bank's overall interest rate risk exposure. Banks can select terms that meet their specific needs without fear of antagonizing the borrower. They can readily sell the security if their needs change. 麓的贫香小手
Help manage interest rate Help manage interest rate risk exposure risk exposure Investment securities are very flexible instruments for managing a bank’s overall interest rate risk exposure. Banks can select terms that meet their specific needs without fear of antagonizing the borrower. They can readily sell the security if their needs change
Pledging requirements By law,commercial banks must pledge collateral against certain types of liabilities. Banks that sell RPs essentially pledge part of the government's portfolio against this debt. 麓制价贸易大考
Pledging requirements Pledging requirements By law, commercial banks must pledge collateral against certain types of liabilities. Banks that sell RPs essentially pledge part of the government’s portfolio against this debt