Insurance contracts have several characteristics that differentiate them from most other contracts. Select those attributes from the choices below. response - incorrect They are are contracts of exclusion They are are contracts of exclusion They are incomplete contracts They are incomplete contracts They involve a principle-agent relationship They involve a principle-agent relationship They are are contracts of indemnity They are are contracts of indemnity They are contracts of adhesion They are contracts of adhesion They are based on utmost good faith They are based on utmost good faith An insurable interest is required

Interest is credited to a fixed annuity no lower than the variable contract rate contract guaranteed rate current rate of inflation prime rate

Which of the following has the largest impact on opportunity cost

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.