Which of the following four companies will have the lowest carrying value on their bonds if they decide to redeem their bonds before the maturity date? assume each company’s bonds have a face value of $15 million and 10% of the premium or discount is unamortized at the time of redemption.
a) company 3 sold their bonds at 102 and redeemed them at 98.
b) company 2 sold their bonds at 98 and redeemed them at 99.
c) company 1 sold their bonds at 94 and redeemed them at 106.
d) company 4 sold their bonds at 103 and redeemed them at 104.

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.