Question

need help please.

Examine the balance sheet of commercial banks in the following table.

Assets	$ Billion			% Total			Liabilities and Net Worth	$ Billion			% Total
Real assets							Liabilities
Equipment and premises	$	193.7		1.3	%		Deposits	$	10,277.3		67.1	%
Other real estate		48.9		0.3			Debt and other borrowed funds		990.0		6.5
Total real assets	$	242.6		1.6	%		Federal funds and repurchase agreements		942.0		6.2
							Other		929.0		6.1
							Total liabilities	$	13,138.3		85.8	%
Financial assets
Cash	$	890.3		5.8	%
Investment securities		5,032.1		32.9
Loans and leases		6,711.3		43.8
Other financial assets		1,215.2		7.9
Total financial assets	$	13,848.9		90.5	%
Other assets
Intangible assets	$	423.4		2.8	%
Other		794.7		5.2
Total other assets	$	1,218.1		8.0	%		Net worth	$	2,171.3		14.2	%
Total	$	15,309.6		100.0	%			$	15,309.6		100.0	%

Balance sheet of FDIC-insured commercial banks and savings institutions

Note: Column sums may differ from total because of rounding error.

Source: Federal Deposit Insurance Corporation, www.fdic.gov, March 2016.

a. What is the ratio of real assets to total assets? (Round your answer to 4 decimal places.)

b. What is the ratio of real assets to total assets for nonfinancial firms in the following table? (Round your answer to 4 decimal places.)

Answer 1

A) The ratio of real assets to total assets is calculated as

242.6/15309.6 =.0158

b) ratio of real assets to other assets of non financial firm = 242.6/15067=.01610