Exhibit 21 -Refer to Exhibit 21

question 55

Multiple Choice

Exhibit 21.3
Use the Information Below for the Following Problem(S)
As a relationship officer for a money-center commercial bank, one of your corporate accounts has just approached you about a one-year loan for $3,000,000. The customer would pay a quarterly interest expense based on the prevailing level of LIBOR at the beginning of each quarter. As is the bank's convention on all such loans, the amount of the interest payment would then be paid at the end of the quarterly cycle when the new rate for the next cycle is determined. You observe the following LIBOR yield curve in the cash market:
$\begin{array}{ll}90 \text {-day LIBOR } & 4.70 \% \\180 \text {-day LIBOR } & 4.85 \% \\\text { 270-day LIBOR } & 5.10 \% \\\text { 360-day LIBOR } & 5.40 \%\end{array}$
-Refer to Exhibit 21.3.If 90-day LIBOR rises to the levels "predicted" by the implied forward rates,what will the dollar level of the bank's interest receipt be at the end of the first quarter?

• A) $35,250.00
• B) $36,375.00
• C) $38,250.00
• D) $40,500.00
• E) None of the above

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Definitions:

Technical Systems

Systems within an organization that involve the machinery, equipment, and processes necessary for the production of goods and services.

Behavioral Approach

A perspective in psychology focusing on observable behaviors and the ways in which the environment influences those behaviors.

Profits

The financial gain obtained when the revenues generated from business activities exceed the expenses, costs, and taxes involved in sustaining the activities.

Bivariate Analysis

Statistical analysis that involves the investigation of the relationship between two variables.