As of 12/31/03, an insurance company has a known obligation to pay $1,000,000 on 12/31/2007. To fund this liability, the company immediately purchases 4-year 5% annual

coupon bonds totaling $822,703 of par value. The company anticipates reinvestment interest

rates to remain constant at 5% through 12/31/07. The maturity value of the bond equals

the par value. Under the following reinvestment interest rate movement scenarios effective

1/1/2004, what best describes the insurance companys profit or (loss) as of 12/31/2007 after

the liability is paid?

(a) Interest rates drop by 1/2%

(b) Interest rates increase by 1/2%

The following items could appear on a bank reconciliation: a. outstanding checks, $670. b. deposits in transit, $1,500. c. nsf check from customer, no. 548, for $175. d. bank collection of note receivable of $800, and interest of $80. e. interest earned on bank balance, $20. f. service charge, $10. g. the business credited cash for $200. the correct amount was $2,000. h. the bank incorrectly decreased the business's by $350 for a check written by another business. classify each item as (1) an addition to the book balance, (2) a subtraction from the book balance, (3) an addition to the bank balance, or (4) a subtraction from the bank balance.