A Thrift Has Funded 10 Percent Fixed-Rate Assets with Variable-Rate

question 23

Multiple Choice

A thrift has funded 10 percent fixed-rate assets with variable-rate liabilities at LIBOR + 2 (L + 2) percent. A bank has funded variable-rate assets with fixed-rate liabilities at 6 percent. The bank's variable-rate assets earn LIBOR + 1 (L + 1) percent. The thrift and the bank have reached agreement on an interest-rate swap with the fixed-rate swap payment at 6 percent and the variable-rate swap payment at LIBOR.
-What will be the net after-swap yield on assets for the thrift?

• A)Variable-rate at LIBOR.
• B)Fixed-rate at 8 percent.
• C)Fixed-rate at 1 percent.
• D)Fixed-rate at 2 percent.
• E)None of the above.

---

Definitions:

Service Delivery Application

Software or systems designed to facilitate and improve the delivery of services to customers or end-users.

Databases

Organized collections of data or information that can be easily accessed, managed, and updated.

Self-Service Systems

Digital or online platforms that allow individuals to perform tasks or services independently, often used in HR for benefits administration and employee inquiries.

Web-Based HR

Human resources activities and functions that are facilitated through the use of internet technologies, allowing for more efficient and accessible HR services.