Chap 3.5 Appendix C
应用光学 英文版 chapter 3
Example 1, If we want to discern a 200mm interval at the distance of 5kilometers, Γ=？ solution： 200 mm 5 4 10 rad By the naked eye， 6 5 10 mm
s
d
Q
PY
Q
y e P
Y
l0 250mm
l0
y tan i s d
y tan e l0
the normal reading distance/明视距离
1. s f s
tan i 250 tan e f
1 l 250mm SD 4( D) 0.25
•Near point/近点: a closest point at which the eye can see an object.
The least distinct distance or near point distance/近点距离
1. Types of telescopes
a) Kepler Telescope:
f o tan tan f e
fo ' fe 1 Positive objective + Positive eyepiece
inverted real image,
0
For a normal relaxed eye: the infinite object images on the retina (视网膜).
The eye muscles are most relaxed when the eye is looking at distant objects (“at infinity”).
Chapter3
Introduction to 教育部科学技术研究重大项目申请 THOMSON SC I E Materials NTIFICLet’s go for the lectures!Introduction to 教育部科学技术研究重大项目申请 THOMSON SC I E Materials NTIFICChapter 3 Ceramics2Introduction to 教育部科学技术研究重大项目申请 THOMSON SC I E Materials NTIFICIntroduction to 教育部科学技术研究重大项目申请 THOMSON SC I E Materials NTIFIC陶瓷材料的概念与分类Concept and classification陶瓷材料的制作工艺Manufacture and processing technologies陶瓷材料的性能及应用Properties and applicationsIntroduction to 教育部科学技术研究重大项目申请 THOMSON SC I E Materials NTIFICIntroductionIntroduction to 教育部科学技术研究重大项目申请 THOMSON SC I E Materials NTIFIC陶瓷的概念和分类 Concept and Classifications陶瓷Ceramic: 烧过的粘土。
是陶器 (pottery)和瓷器 (porcelain)的总称。
定义:陶瓷指经过高温处理所合成的无机非金属材料 (Inorganic & nonmetallic materials), 简称无机材 料。
Introduction to 教育部科学技术研究重大项目申请 THOMSON SC I E Materials NTIFICCeramic compounds:Can be defined as inorganic compounds made by heating clay or other mineral matter to a high temperature at which they partially melt and bond together.7Introduction to 教育部科学技术研究重大项目申请 THOMSON SC I E Materials NTIFICCeramics are refractory polycrystalline（多晶） compounds Highly inert (惰性); biocompatible(生物适应性的） 生物适应性的） Hard and brittle（脆性） High compressive strength（耐压强度） Generally good electric and thermal insulators Good aesthetic appearanceIntroduction to 教育部科学技术研究重大项目申请 THOMSON SC I E Materials NTIFICUsually compound between metallic and nonmetallic elements Always composed of more than one element Bonds are partially or totally ionic, and may have combination of ionic and covalent bonds Majority has ionic (in salt compounds) or metallic and nonmetallic elements (as in oxides Al2O3, MgO, SiO2)Introduction to 教育部科学技术研究重大项目申请 THOMSON SC I E Materials NTIFIC主要组分：硅酸盐化合物在美国，陶瓷泛指硅酸盐材料，又称为传统陶瓷或 普通陶瓷。
语言学第3章
Chapter 3：MorphologyI. Decide whether each of the following statements is True or False:T1. Morphology studies the internal structure of words and the rules by which words are formed.F2.Words are the smallest meaningful units of language.T3. Just as a phoneme is the basic unit in the study of phonology, so is a morpheme the basic unit in the study of morphology.T4. The smallest meaningful units that can be used freely all by themselves are free morphemes.T5. Bound morphemes include two types: roots and affixes.T6. Inflectional morphemes manifest various grammatical relations or grammatical categories such as number, tense, degree, and case.T7. The existing form to which a derivational affix can be added is called a stem, which can be a bound root, a free morpheme, or a derived form itself.F8. Prefixes usually modify the part of speech of the original word, not the meaning of it.F9. There are rules that govern which affix can be added to what type of stem to form a new word. Therefore, words formed according to the morphological rules are acceptable words.T10. Phonetically, the stress of a compound always falls on the first element, while the second element receives secondary stress.T11. The word “if” is a closed class word.12. A morpheme is neither a meaning nor a stretch of sounds but a meaning and a sequence of sounds joined together.II. Fill in each blank below with one word which begins with the letter given:13. Morpheme is the smallest meaningful unit of language.14. The affix “-ish” in the word boyish conveys a grammatical meaning.15. Bound morphemes are those that cannot be used independently but have to be combined with other morphemes, either free or bound, to form a word.16. Affixes are of two types: inflectional affixes and derivative affixes.17. Derivative affixes are added to an existing form to create words.18. A suffix is added to the end of stems to modify the meaning of the original word and it may case change its part of speech.19. Compounding is the combination of two or sometimes more than two words to create new words.20. The rules that govern which affix can be added to what type of stem to form a new word are called morphological rules.21. In terms of morphemic analysis, derivation can be viewed as the addition of affixes to stems to form new words.22. A stem can be a bound root, a free morpheme, or a derived form itself to whicha derivational affix can be added.23. The indefinite articles “a” and “an” form a pair of allomorph that are characterized by c__________________ distribution.III. There are four choices following each statement. Mark the choice that can best complete the statement:D24. The morpheme “vision” in the common word “television” is a(n) ______.A. bound morphemeB. bound formC. inflectional morphemeD. free morpheme D25. The compound word “bookstore” is the place where books are sold. This indicates that the meaning of a compound __________.A. is the sum total of the meaning of its componentsB. can always be worked out by looking at the meanings of morphemesC. is the same as the meaning of a free phrase.D. None of the above.B26. The part of speech of the compounds is generally determined by the part of speech of __________.A. the first elementB. the second elementC. either the first or the second elementD. both the first and the second elements B27. _______ are those that cannot be used independently but have to be combined with other morphemes, either free or bound, to form a word.A. Free morphemesB. Bound morphemesC. Bound wordsD. Words C28. _________ is a branch of grammar which studies the internal structure of words and the rules by which words are formed.A. SyntaxB. GrammarC. MorphologyD. MorphemeC29. The meaning carried by the inflectional morpheme is _______.A. lexicalB. morphemicC. grammaticalD. semanticD30. Bound morphemes are those that ___________.A. have to be used independentlyB. can not be combined with other morphemesC. can either be free or boundD. have to be combined with other morphemes A31. ____ modify the meaning of the stem, but usually do not change the part of speech of the original word.A. PrefixesB. SuffixesC. RootsD. AffixesB32. _________ are often thought to be the smallest meaningful units of language by the linguists.A. WordsB. MorphemesC. PhonemesD. SentencesC33. “-s” in the word “books” is _______.A. a derivative affixB. a stemC. an inflectional affixD. a root B34. The underlined elements in “He enjoys reading books” share a(n) ______. A. allomorph B. morph C. morpheme D. affixIV. Define the following terms:35. morphology ：Morphology is a branch of grammar which studies the internal structure of words and the rules by which words are formed.36. inflectional morphology ：The inflectional morphology studies the inflections.37.derivational morphology: Derivational morphology is the study ofword-formation.38. morpheme: It is the smallest meaningful unit of language.39. free morpheme: Free morphemes are the morphemes which are independent units of meaning and can be used freely all by themselves or in combination with other morphemes.40. bound morpheme:Bound morphemes are the morphemes which cannot be used indepen-dently but have to be combined with other morphemes, either free or bound, to forma word.41. root:A root is often seen as part of a word; it can never stand by itself although it bears clear, definite meaning; it must be combined with another root or an affix to form a word.42. affix: Affixes are of two types: inflectional and derivational. Inflectional affixes manifest various grammatical relations or grammatical categories, while derivational affixes are added to an existing form to create a word.43. prefix: Prefixes occur at the beginning of a word. Prefixes modify the meaning of the stem, but they usually do not change the part of speech of the original word.44. suffix: Suffixes are added to the end of the stems; they modify the meaning of the original word and in many cases change its part of speech.45. derivation: Derivation is a process of word formation by which derivative affixes are added to an existing form to create a word.46. compounding: Compounding can be viewed as the combination of two or sometimes more than two words to create new words.47．morph: A morph is a term that refers to two morphemes that are identical in form but different in meaning.48. allomorph: Allomorphs are variations of the same morpheme. Allomorphs are identical in meaning but different in form.V. Answer the following questions:49. What are the main features of the English compounds?Orthographically a compound can be written as one word, two separate words with or without a hyphen in between. Syntactically, the part of speech of a compound is determined by the last element. Semantically, the meaning of a compound is idiomatic, not calculable from the meanings of all its components. Phonetically, the word stress of a compound usually falls on the firstelement.50. Discuss the types of morphemes with examples.Free morphemes: They are the independent units of meaning and can be used freely all by themselves, for example, “book-” in the word “bookish”. Bound morphemes: They are those that cannot be used independently but have to be combined with other morpheme s, either free or bound, to form a word such as “-ish” in “bookish”. Bound morphemes can be subdivided into roots and affixes. A root is seen as part of a word; it can never stand by itself although it has a clear and definite meaning, such as “gene-” in the word “generate”.Affixes are of two types: inflectional and derivational.Inflectional morphemes manifest various grammatical relations or grammatical categories such as “-s” in the word “books” to indicate plurality of nouns. Derivational affixes are added to an existing form to create a word such as “mis-” in the word “misinform”. Derivational affixes can also be divided into prefixes and suffixes. Prefixes occur at the beginning of a word such as “dis-” in the word “dislike”, while suffixes occur at the end of a word such as “-less” in the word “friendless”.51. Find cases where a morpheme is not assigned a lexical meaning.。
新概念英语第二册学生用书Lesson35
Lesson 35 Stop thief! 捉贼First listen and then answer the question.听录音，然后回答以下问题。
How did Roy stop the thieves?Roy Trenton used to drive a taxi. A short while ago, however, he became a bus driver and he has not regretted it. He is finding his new work far more exciting. When he was driving along Catford Street recently, he saw two thieves rush out of a shop and runtowards a waiting car. One of them was carrying a bag full of money. Roy acted quickly and drove the bus straight at the thieves. The one with the money got such a fright that hedropped the bag. As the thieves were trying to get away in their car, Roy drove his bus into the back of it. While the battered car was moving away, Roy stopped his bus andtelephoned the police. The thieves' car was badly damaged and easy to recognize. Shortly afterwards, the police stopped the car and both men were arrested.New words and expressions 生词和短和短语语Notes on the text 课文注文注释释1 a short while ago, 不久前。
蔡斯《运营管理》第15版Chap03
Copyright ©2017 McGraw-Hill Education. All rights reserved.
3-3
Examples of Successful Companies
• Apple Computer
• Designs the iPhone • Subcontracts the fabrication • Maintains ownership of the IP
• Utilize a contract research organization for clinical trials • Retain the IP
Copyright ©2017 McGraw-Hill Education. All rights reserved.
3-4
Six Phases of the Generic Development Process (Formal Process)
Copyright ©2017 McGraw-Hill Education. All rights reserved.
• Core competency: the one thing a company can do better than its competitors
• A core competency has three characteristics:
1. It provides potential access to a wide variety of markets 2. It increases perceived customer benefits 3. It is hard for competitors to imitate
• Tesla Motors
Chapter-3活性包装
barrier packaging.
Chemical forms of in-pack oxygen scavenging have been introduced to reduce…
These include amines formed rapidly in fish or rancid odors in oil-containing foods. Such
compounds can be present in trace amounts that are significant organoleptically but may not constitute a health hazard.
•Chemical deterioration : food components hydrolysis, industrial chemical oxidation Industrial chemical such as amines , and particularly some printing inks, are oxidized on storage， fried snacks’ oxidation and so on.
dioxide to the beverage.
The presence of an oxygen scavenger is required.(beer and White Wine)
Chemical deterioration:
The flavor of some foods changes on storage because of effects other than oxidation. Tainting is a recurrent problem.
Chapt文法和语言精品PPT课件
={a,b,c,+,*}，则ε， a ， b ， c ， + ， *，aa， ab，ac，a+，a*，ba，bb，bc，b+，b*，aaa，bbb 等都是上的符号串
一个字母表上的全部符号串所组成的集合是无穷 的。
语言的语法成分
非终结符号集Vn={<句子>, <主语>, <谓语>, <冠词>, <形容词>, <名词>,
<动词>, <直接宾语>, <助动词>, <动词原形>}
产生式集P={<句子>→ <主语><谓语>,…… } 开始符号Z= <句子>
又称为语法规则集， 即符号的组成规则
文法G的形式定义：G=(Vn，Vt，P，Z) ➢Vn(非终结符号集)是一个由非终结符号（一般是大写 字母或用<汉字>）构成的非空有穷集合。
2.1 字母表和符号串
符号串的长度：指符号串x中所含符号的个数， 记为|x|。特别地， |ε|=0。 例
={a,b,c,+,*}， |abc|=3，|abc+*abc|=8
符号串相等：若x、y是字母表∑上的两个符号串， 那么当且仅当组成x的各符号与组成y的各符号依 次相等时，则符号串x与符号串y相等，记作x=y。 例
学习重点
1 文法的定义、分类和二义性 2 最左推导、规范推导(或最右推导) 3 语言、句型和句子 4 短语、简单短语(或直接短语)和句柄 5 语法树
形式语言(P12)
如果不考虑语义和语用，只从语法这一侧面来看 语言，它是由符合某种语法（用规则定义）的句 子构成的集合，这种意义下的语言称作形式语言。
财务报表分析与证券估值Chap003
3-6
The Method of Comparables: Hewlett Packard, Lenovo, and Dell 2011
Percentile P/B
P/B
Hale Waihona Puke P/EP/EP/S
P/S P/CFO P/ebitda P/ebit
95
7.9
12.7 Negative 49.2 8.9
8.1 Negative 30.1 Negative
earnings
cash flow
ebit
75
2.9
2.7
23.5
19.1 1.7
2.0
18.8
business firms) • The dividend irrelevance concept • Why financing transactions do not generate value, except in particular circumstances • Why the focus of value creation is on the investing and operating activities of a firm • How the method of comparables works (or does not work) • How asset-based valuation works (or does not work) • How multiple screening strategies work (or do not work) • How fundamental analysis differs from screening
国际商务谈判英文 chapter3
• 3.2.3 Where to collect information • International organizations. • Governments. • Service organizations • Directories and newsletters. • On-line service.
16
• 3.3.4 Open agenda and restricted agenda • ①Open agenda • ②Restricted agenda
17
3.4 Forming the Negotiation Team
• 3.4.1Size of the negotiation team • What then is a commendable size for a
12
• 3．3 Negotiation agenda • Negotiation Agenda refers to the
arrangement for the timing and site choice of the negotiation, and issues discussed. The agenda is usually prepared by the host party or discussed by both parties in advance， which can be segmented into open agenda and restricted agenda sometimes．
18
• 3．4．2 The staffing of the negotiation team • (1)OrganizationaI structure of the team
Chap008金融机构管理课后题答案
Chapter EightInterest Rate Risk IChapter OutlineIntroductionThe Central Bank and Interest Rate RiskThe Repricing ModelRate-Sensitive AssetsRate-Sensitive LiabilitiesEqual Changes in Rates on RSAs and RSLsUnequal Changes in Rates on RSAs and RSLsWeaknesses of the Repricing ModelMarket Value EffectsOveraggregationThe Problem of RunoffsCash Flows from Off-Balance Sheet ActivitiesThe Maturity ModelThe Maturity Model with a Portfolio of Assets and Liabilities Weakness of the Maturity ModelSummaryAppendix 8A: Term Structure of Interest RatesUnbiased Expectations TheoryLiquidity Premium Theory Market Segmentation TheorySolutions for End-of-Chapter Questions and Problems: Chapter Eight1. What was the impact on interest rates of the borrowed reserves targetingregime used by the Federal Reserve from 1982 to 1993The volatility of interest rates was significantly lower than under the nonborrowed reserves target regime used in the three years immediately prior to 1982. Figure 8-1 indicates that both the level and volatility of interest rates declined even further after 1993 when the Fed decided that it would target primarily the fed funds rate as a guide for monetary policy.2. How has the increased level of financial market integration affectedinterest ratesIncreased financial market integration, or globalization, increases the speed with which interest rate changes and volatility are transmitted among countries. The result of this quickening of global economic adjustment is to increase the difficulty and uncertainty faced by the Federal Reserve as it attempts to manage economic activity within the U.S. Further, because FIs have become increasingly more global in their activities, any change in interest rate levels or volatility caused by Federal Reserve actions more quickly creates additional interest rate risk issues for these companies.3. What is the repricing gap In using this model to evaluate interest raterisk, what is meant by rate sensitivity On what financial performance variable does the repricing model focus Explain.The repricing gap is a measure of the difference between the dollar value of assets that will reprice and the dollar value of liabilities that will reprice within a specific time period, where reprice means the potential to receive a new interest rate. Rate sensitivity represents the time interval where repricing can occur. The model focuses on the potential changes in the net interest income variable. In effect, if interest rates change, interest income and interest expense will change as the various assets and liabilities are repriced, that is, receive new interest rates.4. What is a maturity bucket in the repricing model Why is the length oftime selected for repricing assets and liabilities important when using the repricing modelThe maturity bucket is the time window over which the dollar amounts of assets and liabilities are measured. The length of the repricing period determines which of the securities in a portfolio are rate-sensitive. The longer the repricing period, the more securities either mature or need to be repriced, and, therefore, the more the interest rate exposure. An excessively short repricing period omits consideration of the interest rate risk exposure of assets and liabilities are that repriced in the period immediately following the end of the repricing period. That is, it understates the rate sensitivity of the balance sheet. An excessively long repricing period includes many securities that are repriced at different times within the repricing period, thereby overstating the rate sensitivity of the balance sheet.5. Calculate the repricing gap and the impact on net interest income of a 1percent increase in interest rates for each of the following positions:Rate-sensitive assets = $200 million. Rate-sensitive liabilities =$100 million.Repricing gap = RSA - RSL = $200 - $100 million = +$100 million.NII = ($100 million)(.01) = +$ million, or $1,000,000.Rate-sensitive assets = $100 million. Rate-sensitive liabilities =$150 million.Repricing gap = RSA - RSL = $100 - $150 million = -$50 million.NII = (-$50 million)(.01) = -$ million, or -$500,000.Rate-sensitive assets = $150 million. Rate-sensitive liabilities =$140 million.Repricing gap = RSA - RSL = $150 - $140 million = +$10 million.NII = ($10 million)(.01) = +$ million, or $100,000.a. Calculate the impact on net interest income on each of the abovesituations assuming a 1 percent decrease in interest rates.NII = ($100 million) = -$ million, or -$1,000,000.NII = (-$50 million) = +$ million, or $500,000.NII = ($10 million) = -$ million, or -$100,000.b. What conclusion can you draw about the repricing model from theseresultsThe FIs in parts (1) and (3) are exposed to interest rate declines(positive repricing gap) while the FI in part (2) is exposed to interest rate increases. The FI in part (3) has the lowest interest rate riskexposure since the absolute value of the repricing gap is the lowest,while the opposite is true for part (1).6. What are the reasons for not including demand deposits as rate-sensitiveliabilities in the repricing analysis for a commercial bank What is the subtle, but potentially strong, reason for including demand deposits inthe total of rate-sensitive liabilities Can the same argument be madefor passbook savings accountsThe regulatory rate available on demand deposit accounts is zero. Although many banks are able to offer NOW accounts on which interest can be paid, this interest rate seldom is changed and thus the accounts are not really sensitive. However, demand deposit accounts do pay implicit interest in the form of not charging fully for checking and other services. Further, when market interest rates rise, customers draw down their DDAs, which may cause the bank to use higher cost sources of funds. The same or similar arguments can be made for passbook savings accounts.7. What is the gap ratio What is the value of this ratio to interest raterisk managers and regulatorsThe gap ratio is the ratio of the cumulative gap position to the total assets of the bank. The cumulative gap position is the sum of the individual gaps over several time buckets. The value of this ratio is that it tells the direction of the interest rate exposure and the scale of that exposure relative to the size of the bank.8. Which of the following assets or liabilities fit the one-year rate or repricing sensitivity test91-day . Treasury bills Yes1-year . Treasury notes Yes20-year . Treasury bonds No20-year floating-rate corporate bonds with annual repricing Yes30-year floating-rate mortgages with repricing every two years No30-year floating-rate mortgages with repricing every six months YesOvernight fed funds Yes9-month fixed rate CDs Yes1-year fixed-rate CDs Yes5-year floating-rate CDs with annual repricing YesCommon stock No9. Consider the following balance sheet for WatchoverU Savings, Inc. (in millions):Assets Liabilities and EquityFloating-rate mortgages Demand deposits(currently 10% annually) $50 (currently 6% annually) $7030-year fixed-rate loans Time deposits(currently 7% annually) $50 (currently 6% annually $20Equity $10 Total Assets $100 Total Liabilities & Equity$100a. What is WatchoverU’s expected net interest income at year-endCurrent expected interest income:$5m + $3.5m = $8.5m.Expected interest expense: $4.2m + $1.2m = $5.4m.Expected net interest income: $8.5m - $5.4m = $3.1m.b. What will be the net interest income at year-end if interest ratesrise by 2 percentAfter the 200 basis point interest rate increase, net interest incomedeclines to:50 + 50 - 70 - 20(.06) = $9.5m - $6.8m = $2.7m, a decline of $0.4m.c. Using the cumulative repricing gap model, what is the expected netinterest income for a 2 percent increase in interest rates Wachovia’s' repricing or funding gap is $50m - $70m = -$20m. The change in net interest income using the funding gap model is (-$20m) = -$.4m.d.What will be the net interest income at year-end if interest ratesincrease 200 basis points on assets, but only 100 basis points onliabilities Is it reasonable for changes in interest rates to affectbalance sheet in an uneven manner WhyAfter the unbalanced rate increase, net interest income will be 50 +50 - 70 - 20(.06) = $9.5m - $6.1m = $3.4m, an increase of $0.3m. It isnot uncommon for interest rates to adjust in an uneven manner over two sides of the balance sheet because interest rates often do not adjust solely because of market pressures. In many cases the changes areaffected by decisions of management. Thus you can see the difference between this answer and the answer for part a.10. What are some of the weakness of the repricing model How have largebanks solved the problem of choosing the optimal time period forrepricing What is runoff cash flow, and how does this amount affect the repricing model’s analysisThe repricing model has four general weaknesses:(1) It ignores market value effects.(2) It does not take into account the fact that the dollar value of ratesensitive assets and liabilities within a bucket are not similar. Thus, if assets, on average, are repriced earlier in the bucket thanliabilities, and if interest rates fall, FIs are subject to reinvestment risks.(3) It ignores the problem of runoffs, that is, that some assets are prepaidand some liabilities are withdrawn before the maturity date.(4) It ignores income generated from off-balance-sheet activities.Large banks are able to reprice securities every day using their own internal models so reinvestment and repricing risks can be estimated for each day ofthe year.Runoff cash flow reflects the assets that are repaid before maturity and the liabilities that are withdrawn unsuspectedly. To the extent that either of these amounts is significantly greater than expected, the estimated interest rate sensitivity of the bank will be in error.11. Use the following information about a hypothetical government securitydealer named . Jorgan. Market yields are in parenthesis, and amounts are in millions.Assets Liabilities and EquityCash $10 Overnight Repos $1701 month T-bills %) 75 Subordinated debt3 month T-bills %) 75 7-year fixed rate % 1502 year T-notes %) 508 year T-notes %) 1005 year munis (floating rate)% reset every 6 months) 25 Equity 15 Total Assets $335 Total Liabilities & Equity$335a. What is the funding or repricing gap if the planning period is 30 days91 days 2 years Recall that cash is a noninterest-earning asset.Funding or repricing gap using a 30-day planning period = 75 - 170 = -$95 million.Funding gap using a 91-day planning period = (75 + 75) - 170 = -$20 million.Funding gap using a two-year planning period = (75 + 75 + 50 + 25) - 170 = +$55 million.b. What is the impact over the next 30 days on net interest income if allinterest rates rise 50 basis points Decrease 75 basis pointsNet interest income will decline by $475,000. NII = FG(R) = -95(.005) = $0.475m.Net interest income will increase by $712,500. NII = FG(R)= -95(.0075) = $0.7125m.c.The following one-year runoffs are expected: $10 million for two-yearT-notes, and $20 million for eight-year T-notes. What is the one-year repricing gapFunding or repricing gap over the 1-year planning period = (75 + 75 + 10 + 20 + 25) - 170 = +$35 million.d. If runoffs are considered, what is the effect on net interest incomeat year-end if interest rates rise 50 basis points Decrease 75 basispointsNet interest income will increase by $175,000. NII = FG(R) = 35 = $0.175m.Net interest income will decrease by $262,500, NII = FG(R) = 35 = -$0.2625m.12. What is the difference between book value accounting and market valueaccounting How do interest rate changes affect the value of bank assets and liabilities under the two methods What is marking to marketBook value accounting reports assets and liabilities at the original issue values. Current market values may be different from book values because they reflect current market conditions, such as interest rates or prices. This is especially a problem if an asset or liability has to be liquidated immediately. If the asset or liability is held until maturity, then the reporting of book values does not pose a problem.For an FI, a major factor affecting asset and liability values is interestrate changes. If interest rates increase, the value of both loans (assets) and deposits and debt (liabilities) fall. If assets and liabilities are held until maturity, it does not affect the book valuation of the FI. However, ifdeposits or loans have to be refinanced, then market value accounting presents a better picture of the condition of the FI.The process by which changes in the economic value of assets and liabilities are accounted is called marking to market. The changes can be beneficial as well as detrimental to the total economic health of the FI.13. Why is it important to use market values as opposed to book values whenevaluating the net worth of an FI What are some of the advantages ofusing book values as opposed to market valuesBook values represent historical costs of securities purchased, loans made, and liabilities sold. They do not reflect current values as determined by market values. Effective financial decision-making requires up-to-date information that incorporates current expectations about future events. Market values provide the best estimate of the present condition of an FI and serve as an effective signal to managers for future strategies.Book values are clearly measured and not subject to valuation errors, unlike market values. Moreover, if the FI intends to hold the security until maturity, then the security's current liquidation value will not be relevant. That is, the paper gains and losses resulting from market value changes will never be realized if the FI holds the security until maturity. Thus, the changes in market value will not impact the FI's profitability unless the security is sold prior to maturity.14. Consider a $1,000 bond with a fixed-rate 10 percent annual coupon (Cpn %)and a maturity (N) of 10 years. The bond currently is trading to amarket yield to maturity (YTM) of 10 percent. Complete the followingtable.From Par, $ From Par, %N Cpn % YTM Price Change in Price Change in Price8 10% 9% $1, $ %9 10% 9% $1, $ %10 10% 9% $1, $ %10 10% 10% $1,10 10% 11% $ -$ %11 10% 11% $ -$ %12 10% 11% $ -$ %Use this information to verify the principles of interest rate-pricerelationships for fixed-rate financial assets.Rule One: Interest rates and prices of fixed-rate financial assets move inversely. See the change in price from $1,000 to $ for the change in interest rates from 10 percent to 11 percent, or from $1,000 to $1, when rates change from 10 percent to 9 percent.Rule Two: The longer is the maturity of a fixed-income financial asset, the greater is the change in price for a given change in interest rates.A change in rates from 10 percent to 11 percent has caused the 10-yearbond to decrease in value $, but the 11-year bond will decrease in value $, and the 12-year bond will decrease $.Rule Three: The change in value of longer-term fixed-rate financialassets increases at a decreasing rate. For the increase in rates from 10 percent to 11 percent, the difference in the change in price between the 10-year and 11-year assets is $, while the difference in the change in price between the 11-year and 12-year assets is $.Rule Four: Although not mentioned in the text, for a given percentage () change in interest rates, the increase in price for a decrease in ratesis greater than the decrease in value for an increase in rates. Thus for rates decreasing from 10 percent to 9 percent, the 10-year bond increases $. But for rates increasing from 10 percent to 11 percent, the 10-year bond decreases $.15. Consider a 12-year, 12 percent annual coupon bond with a required returnof 10 percent. The bond has a face value of $1,000.a. What is the price of the bondPV = $120*PVIFAi=10%,n=12 + $1,000*PVIFi=10%,n=12= $1,b. If interest rates rise to 11 percent, what is the price of the bondPV = $120*PVIFAi=11%,n=12 + $1,000*PVIFi=11%,n=12= $1,c. What has been the percentage change in priceP = ($1, - $1,/$1, = or – percent.d. Repeat parts (a), (b), and (c) for a 16-year bond.PV = $120*PVIFAi=10%,n=16 + $1,000*PVIFi=10%,n=16= $1,PV = $120*PVIFAi=11%,n=16 + $1,000*PVIFi=11%,n=16= $1,P = ($1, - $1,/$1, = or – percent.e. What do the respective changes in bond prices indicateFor the same change in interest rates, longer-term fixed-rate assets have a greater change in price.16. Consider a five-year, 15 percent annual coupon bond with a face value of$1,000. The bond is trading at a market yield to maturity of 12 percent.a. What is the price of the bondPV = $150*PVIFAi=12%,n=5 + $1,000*PVIFi=12%,n=5= $1,b. If the market yield to maturity increases 1 percent, what will be thebond’s new pricePV = $150*PVIFAi=13%,n=5 + $1,000*PVIFi=13%,n=5= $1,c. Using your answers to parts (a) and (b), what is the percentage changein the bond’s price as a result of the 1 percent increase in interest ratesP = ($1, - $1,/$1, = or – percent.d. Repeat parts (b) and (c) assuming a 1 percent decrease in interestrates.PV = $150*PVIFAi=11%,n=5 + $1,000*PVIFi=11%,n=5= $1,P = ($1, - $1,/$1, = or percente. What do the differences in your answers indicate about the rate-pricerelationships of fixed-rate assetsFor a given percentage change in interest rates, the absolute value of the increase in price caused by a decrease in rates is greater than the absolute value of the decrease in price caused by an increase in rates.17. What is maturity gap How can the maturity model be used to immunize anFI’s portfolio What is the critical requirement to allow maturitymatching to have some success in immunizing the balance sheet of an FIMaturity gap is the difference between the average maturity of assets and liabilities. If the maturity gap is zero, it is possible to immunize the portfolio, so that changes in interest rates will result in equal but offsetting changes in the value of assets and liabilities and net interest income. Thus, if interest rates increase (decrease), the fall (rise) in the value of the assets will be offset by a perfect fall (rise) in the value of the liabilities. The critical assumption is that the timing of the cash flows on the assets and liabilities must be the same.18. Nearby Bank has the following balance sheet (in millions):Assets Liabilities and EquityCash $60 Demand deposits $1405-year treasury notes $60 1-year Certificates of Deposit $160 30-year mortgages $200 Equity $20Total Assets $320 Total Liabilities and Equity$320What is the maturity gap for Nearby Bank Is Nearby Bank more exposed to an increase or decrease in interest rates Explain whyM A = [0*60 + 5*60 + 200*30]/320 = years, and ML= [0*140 + 1*160]/300 = .Therefore the maturity gap = MGAP = – = years. Nearby bank is exposed toan increase in interest rates. If rates rise, the value of assets will decrease much more than the value of liabilities.19. County Bank has the following market value balance sheet (in millions,annual rates):Assets Liabilities and EquityCash $20 Demand deposits $10015-year commercial loan @ 10% 5-year CDs @ 6% interest,interest, balloon payment $160 balloon payment $21030-year Mortgages @ 8% interest, 20-year debentures @ 7% interest$120monthly amortizing $300 Equity $50Total Assets $480 Total Liabilities & Equity $480a. What is the maturity gap for County BankMA= [0*20 + 15*160 + 30*300]/480 = years.ML= [0*100 + 5*210 + 20*120]/430 = years.MGAP = – = years.b. What will be the maturity gap if the interest rates on all assets andliabilities increase by 1 percentIf interest rates increase one percent, the value and average maturity of the assets will be:Cash = $20Commercial loans = $16*PVIFAn=15, i=11% + $160*PVIFn=15,i=11%= $Mortgages = $,294*PVIFAn=360,i=9%= $MA= [0*20 + *15 + *30]/(20 + + = yearsThe value and average maturity of the liabilities will be: Demand deposits = $100CDs = $*PVIFAn=5,i=7% + $210*PVIFn=5,i=7%= $Debentures = $*PVIFAn=20,i=8% + $120*PVIFn=20,i=8%= $ML= [0*100 + 5* + 20*]/(100 + + = yearsThe maturity gap = MGAP = – = years. The maturity gap increased because the average maturity of the liabilities decreased more than the average maturity of the assets. This result occurred primarily because of the differences in the cash flow streams for the mortgages and the debentures.c. What will happen to the market value of the equityThe market value of the assets has decreased from $480 to $, or $. The market value of the liabilities has decreased from $430 to $, or $. Therefore the market value of the equity will decrease by $ - $ = $, or percent.d. If interest rates increased by 2 percent, would the bank be solvent The value of the assets would decrease to $, and the value of the liabilities would decrease to $. Therefore the value of the equity would be $. Although the bank remains solvent, nearly 65 percent of the equity has eroded because of the increase in interest rates.20. Given that bank balance sheets typically are accounted in book valueterms, why should the regulators or anyone else be concerned about howinterest rates affect the market values of assets and liabilitiesThe solvency of the balance sheet is an important variable to creditors of the bank. If the capital position of the bank decreases to near zero, creditors may not be willing to provide funding for the bank, and the bank may need assistance from the regulators, or may even fail. Thus any change in the market value of assets or liabilities that is caused by changes in the level of interest rate changes is of concern to regulators.21. If a bank manager is certain that interest rates were going to increasewithin the next six months, how should the bank manager adjust thebank’s maturity gap to take advantage of this antici pated increase What if the manager believed rates would fall Would your suggestedadjustments be difficult or easy to achieveWhen rates rise, the value of the longer-lived assets will fall by more the shorter-lived liabilities. If the maturity gap (or duration gap) is positive, the bank manager will want to shorten the maturity gap. If the repricing gap is negative, the manager will want to move it towards zero or positive. If rates are expected to decrease, the manager should reverse these strategies. Changing the maturity, duration, or funding gaps on the balance sheet often involves changing the mix of assets and liabilities. Attempts to make these changes may involve changes in financial strategy for the bank which may notbe easy to accomplish. Later in the text, methods of achieving the same results using derivatives will be explored.22. Consumer Bank has $20 million in cash and a $180 million loan portfolio.The assets are funded with demand deposits of $18 million, a $162 million CD and $20 million in equity. The loan portfolio has a maturity of 2years, earns interest at the annual rate of 7 percent, and is amortized monthly. The bank pays 7 percent annual interest on the CD, but theinterest will not be paid until the CD matures at the end of 2 years.a. What is the maturity gap for Consumer Bank= [0*$20 + 2*$180]/$200 = yearsMA= [0*$18 + 2*$162]/$180 = yearsMLMGAP = – = 0 years.b. Is Consumer Bank immunized or protected against changes in interestrates Why or why notIt is tempting to conclude that the bank is immunized because thematurity gap is zero. However, the cash flow stream for the loan and the cash flow stream for the CD are different because the loan amortizesmonthly and the CD pays annual interest on the CD. Thus any change in interest rates will affect the earning power of the loan more than the interest cost of the CD.c. Does Consumer Bank face interest rate risk That is, if marketinterest rates increase or decrease 1 percent, what happens to thevalue of the equityThe bank does face interest rate risk. If market rates increase 1percent, the value of the cash and demand deposits does not change.However, the value of the loan will decrease to $, and the value of the CD will fall to $. Thus the value of the equity will be ($ + $20 - $18 - $ = $. In this case the increase in interest rates causes the marketvalue of equity to increase because of the reinvestment opportunities on the loan payments.If market rates decrease 1 percent, the value of the loan increases to $, and the value of the CD increases to $. Thus the value of the equitydecreases to $.d. How can a decrease in interest rates create interest rate riskThe amortized loan payments would be reinvested at lower rates. Thuseven though interest rates have decreased, the different cash flowpatterns of the loan and the CD have caused interest rate risk.23. FI International holds seven-year Acme International bonds and two-yearBeta Corporation bonds. The Acme bonds are yielding 12 percent and the Beta bonds are yielding 14 percent under current market conditions.a. What is the weighted-average maturity of FI’s bond portfolio if 40percent is in Acme bonds and 60 percent is in Beta bondsAverage maturity = x 7 years + x 2 years = 4 yearsb. What proportion of Acme and Beta bonds should be held to have aweighted-average yield of percentLet X* + (1 - X)* = . Solving for X, we get 25 percent. In order to get an average yield of percent, we need to hold 25 percent of Acme and 75 percent of Beta.c. What will be the weighted-average maturity of the bond portfolio ifthe weighted-average yield is realizedThe average maturity of the portfolio will decrease to x 7 + x 2 = years.24. An insurance company has invested in the following fixed-incomesecurities: (a) $10,000,000 of 5-year Treasury notes paying 5 percentinterest and selling at par value, (b) $5,800,000 of 10-year bonds paying7 percent interest with a par value of $6,000,000, and (c) $6,200,000 of20-year subordinated debentures paying 9 percent interest with a parvalue of $6,000,000.a. What is the weighted-average maturity of this portfolio of assets= [5*$10 + 10*$ + 20*$]/$22 = 232/22 = yearsMAb. If interest rates change so that the yields on all of the securitiesdecrease 1 percent, how does the weighted-average maturity of theportfolio changeTo determine the weighted-average maturity of the portfolio for a rate decrease of 1 percent, the new value of each security must be determined. This calculation will require knowing the YTM of each security before the rate change.T-notes are selling at par, so the YTM = 5 percent. Therefore, the new value will bePV = $500,000*PVIFAn=5,i=4% + $10,000,000*PVIFn=5,i=4%= $10,445,182.10-year bonds: Par = $6,000,000, PV = $5,800,000, Cpn = 7 percent YTM= %. The new PV = $420,000*PVIFAn=10,i=% + $6,000,000*PVIFn=10,i=%= $6,222,290.Debentures: Par = $6,000,000, PV = $6,200,000, Cpn = 9 percentpercent. The new PV = $540,000*PVIFAn=20,i=% + $6,000,000*PVIFn=20,i==$6,820,418.The total value of the assets after the change in rates will be$23,487,890, and the weighted-average maturity will be [5*10,445,182 +10*6,222,290 + 20*6,820,418]/23,487,890 = 250,857,170/23,487,890 = years.c. Explain the changes in the maturity values if the yields increase by 1 percent.。