Semester “Spring 2011”
“Money & Banking (MGT411)”
This is to inform that Graded Discussion Board (GDB)
Has been opened according to the following schedule
Date opening and Time
June 09, 2011 At 12:01 A.M. (Mid-Night)
Date closing and Time
June 13, 2011 At 11:59 P.M. (Mid-Night)
Note: No extra or bonus/grace period is available for attempting GBD.
S&K Saving Bank is a medium size bank and operating locally. It provides different financial services to individuals and businesses. In January 2011, S&K Saving Bank has issued saving certificate (certificate of deposits) for Rs. 1,000 with one year maturity at 4% interest rate. In next year bank will reissue the certificate of deposits; on reissuance interest rate on these may vary due to change in inflation rate and monitory policy. With the borrowed money the bank has purchased treasury bonds for Rs 1000 at 8% fixed interest having two year maturity. Previous trend shows that interest rate may rise by 1-2 percent. Required: Keeping in view all these information, what type of risk the bank will face while entering into these transactions? Also mention the valid reason for choosing this type of risk. Hint: Write your answer in the following format.Question Comments Type of risk: (Give only name) ? Specify the reason for choosing this risk in Bullets/ Numbers form ?
Instructions Read the following instructions before giving your comments on GDB:
Ø Write down only keywords. Your answer should not exceed 25 words (negative impact will be logical if the student violate the words restriction).
1. Use the font style “Times New Roman” and font size “12”. 2. Your answer should be relevant to the topic i.e. clear and concise. 3. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course. 4. Books, websites and other reading material may be consulted before posting your comments but copying or reproducing the text from books, websites and other reading materials is strictly prohibited. Such comments will be marked as Zero (0).5. Obnoxious or ignoble answer should be strictly avoided.
No need to mentions the question. Only specific answer is required.