(Answered) Finance: Liquidity risk-mispriced bond-overhead efficiency ratio

1) Liquidity risk at a financial intermediary (FI) is the risk;that promised cash flows from loans and securities held by FIs may not be paid in full.;incurred by an FI when the maturities of its assets and liabilities do not match.;that a sudden surge in liability withdrawals may require an FI to liquidate assets quickly at fire sale prices.;incurred by an FI when its investments in technology do not result in cost savings or revenue growth.;risk that an FI may not have enough capital to offset a sudden decline in the value of its assets.;2) An 12 year annual payment corporate bond has a market price of $925. It pays annual interest of $60 and its required rate of return is 7%. By how much is the bond mispriced?;$0.00;Overpriced by $7.29;Underpriced by $7.29;Overpriced by $4.43;Underpriced by $4.43;3) Plains National Bank has interest income of $250 million and interest expense of $110 million, noninterest income of $40 million and noninterest expense of $65 million on earning assets of $3,900 million. What is Plains' overhead efficiency ratio?;61.54%;44.00%;9.23%;42.45%;37.46%
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Finance: Liquidity risk-mispriced bond-overhead efficiency ratio

 


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