The Average Duration of the Loans Is 10 Years If the Exchange Rate Remains the Same,what Is the Dollar

question 91

Multiple Choice

The average duration of the loans is 10 years.The average duration of the deposits is 3 years. $\begin{array}{llr}\text { Consumer loans } & \$ 50 \text { million Deposits } & \$ 235 \text { million } \\\text { Commercial Loans } & \$ 200 \text { million Equity } & \$ 15 \text { million } \\\text { Total Assets } & \$ 250 \text { million Total Liabilities \& Equity } & \$ 250 \text { million }\end{array}$ If the exchange rate remains the same,what is the dollar spread earned by the bank at the end of the year?

• A)$750,000.
• B)$1,000,000.
• C)$1,250,000.
• D)$1,600,000.

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Definitions:

Short-run Supply

The amount of output that producers are willing and able to sell at different prices over a short period of time, often assuming some inputs are fixed.

State License Fee

A fee required by certain state governments for the granting of a license to operate a particular business or profession within that state.

Short Run

A time period in which at least one input, such as capital equipment, is fixed, limiting the adjustments a firm can make to production levels.

Maximize Profits

Maximizing profits is the goal of most firms, achieved by increasing revenue while minimizing costs, leading to the highest possible financial return from their operations.