adding to the investment portfolio

ASSIGNMENT DUE DATE FRIDAY APRIL 28, 2017 @ 9PM PACIFIC STANDARD TIME (NO EXCEPTIONS ON DUE DATE)

PLEASE INCLUDE CITATIONS AND REFERENCES

Managing Investment Portfolios

· Chapter 10, Problem 11

A bank’s economics department has just forecast accelerated growth in the economy, with GDP expected to grow at a 4.5 percent annual growth rate for at least the next two years. What are the implications of this economic forecast for an investments officer? What types of securities should the officer think most seriously about adding to the investment portfolio? Why? Suppose the bank holds a security portfolio similar to that described in Table 10-3 for all insured U.S. banks. Which types of securities might the investments officer want to think seriously about selling if the projected economic expansion takes place? What losses might occur and how could these losses be minimized?

ABLE 10–3: Investment Securities Held by FDIC-Insured Commercial Banks, 2010*

· Chapter 11, Problem 1

Ocean View State Bank estimates that over the next 24 hours the following cash inflows and outflows will occur (all figures in millions of dollars):

What is this bank’s projected net liquidity position in the next 24 hours? From what sources can the bank cover its liquidity needs?

Market Insight

Based on your readings for this unit, describe what it means to be liquid. When is a bank “loaned up,” and how does this relate to liquidity?

Assignment Submission

Provide full documentation of the process used to reach solutions. Use information from the textbook to inform your analysis, incorporating creativity, critical thinking, and real-life perspectives. Present your analyses and results in a professional manner.