Instructions – PLEASE READ THEM CAREFULLY – The Assignment must be submitted onl

Posted: January 24th, 2023

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Instructions – PLEASE READ THEM CAREFULLY
– The Assignment must be submitted only in WORD format via the allocated folder.
– Students are advised to make their work clear and well-presented, marks may be reduced for poor presentation.
– Students must mention the question number clearly in their answers.
– Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
– All answers must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).
– Add minimum 3 references in APA Style.
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Assignment Questions

Q1
a)Which act/s in the US Banking Sector supports the lifeline banking service? [1Mark]
b)Explain the different services that are covered under Lifeline Banking for low-income people. [2 Marks]
Q2
a)What are the different non-deposit sources of funds for banks? [1Mark]
b)Explain the risks for the banks especially associated with non-deposit sources of funds. [2 Marks]
Q3
a)What is the difference between real and nominal interest rates? [1Mark]
b)Explain the concept of Interest Rate Determination in the light of the Loanable Fund Theory. [2 Marks]
Q4
a)What are financial derivatives? [1Mark]
b)Explain the process of a financial Put Option with the help of an example. [2 Marks]
Q5 ((((Must mention the formula and each step in details))))
a)What is the difference between an Asset sensitive and a Liability sensitive firm? [1Mark]
b)If interest-sensitive assets (ISA) and interest-sensitive liabilities (ISL) of a financial firm are $125 million & $100 million respectively, what will be its interest-sensitive GAP (IS GAP)? Calculate the Relative IS GAP ratio for the same financial institution and comment, Is that firm Asset sensitive? [2 Marks]

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