Banks Management Assignment

Assignment 3

FIN401 (1st Term 2021-2022)

Deadline: 5/12/2021 @ 23:59

Course Name: Banks Management	Student’s Name:
Course Code: FIN401	Student’s ID Number:
Semester: I	CRN:
Academic Year: 1442/1443 H, 1st Term

For Instructor’s Use only

Instructor’s Name: Dr Firoz Alam
Students’ Grade: / 5	Level of Marks: High/Middle/Low

Instructions – PLEASE READ THEM CAREFULLY

· This assignment is an individual assignment.

· The Assignment must be submitted only in WORD format via allocated folder.

· Assignments submitted through email will not be accepted.

· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.

· Students must mention question number clearly in their answer.

· Late submission will NOT be accepted.

· 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 answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).

Submissions without this cover page will NOT be accepted.

Q.1: Blue Skies Bank of Florida issues a three-month (90-day) negotiable CD in the amount of $20 million to ABC Insurance Company at a negotiated annual interest rate of 2.75 percent (360-day basis). Calculate the value of this CD account on the day it matures, and the amount of interest income ABC will earn. What interest return will ABC Insurance earn in a 365-day year? [2.5 Marks]

Q2. What are the advantages of borrowing from the Federal Reserve banks or other central banks? Are there any disadvantages? What is the difference between primary, secondary, and seasonal credit? What is a Lombard rate and why might such a rate be useful in achieving monetary policy goals? [2.5 Marks]

Answer:

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