Homework Answers
Solution:-
Assets - Asset is something your company owns that can provide future economic benefits
Liabilities - Liabilities are the firm’s obligations – either money that must be paid or services that must be performed.
Net worth - Net worth is the measure of the wealth of a firm or person.
Net worth = Total Assets - Total liabilities
= $50 Billion - $42 Billion
= $8 Billion
Add Answer to:
3. Write short notes on a bank's assets, liabilities, and net worth. Suppose, First National Bank...
Assets Cash Last National Bank Balance Sheet 1 Liabilities and net worth Checkable $ 19.000 $...
Assets Cash Last National Bank Balance Sheet 1 Liabilities and net worth Checkable $ 19.000 $ 115,000 deposits $ 98,000 Stock shares 280,000 $ 278,000 S Reserves Property Instructions: Enter your answers as whole numbers. a. Suppose a depositor at the bank writes a check for $25,000 to a contractor to pay for some remodeling work done on her home. The contractor deposits the check in his bank (which is a different bank). What will last National Bank's balance sheet...
Please answer the following questions. I put -9.20%, but it says it's wrong. Suppose First National...
Please answer the following questions.
I put -9.20%, but it says it's wrong.
Suppose First National Bank holds $100 million in assets with an average duration of 4 years, and it holds $85 million in liabilities with an average duration of 2 years Further suppose there is a 4-percentage-point increase in interest rates. Calculate the percentage decrease in First National Bank's net worth relative to the total original asset value A 4 percentage point increase in interest rates decreases First...
Balance Sheet of Big-But-Simple Bank (BBSB) Assets Liabilities and Net Worth Loans $300 billion Deposits $240...
Balance Sheet of Big-But-Simple Bank (BBSB) Assets Liabilities and Net Worth Loans $300 billion Deposits $240 billion Equity $60 billion The table above shows the balance sheet of Big-But-Simple Bank (BBSB). This bank has taken $60 billion of shareholders' equity and leveraged it: Answer: ______ to ______.
Question 80 0.1pts If a bank's assets are $500 million and its liabilities are $380 million,...
Question 80 0.1pts If a bank's assets are $500 million and its liabilities are $380 million, then its net worth (bank capital) is percent at the same time that its liabilities rise by 5 percent, the percentage change in If the bank's assets then rise by 6 the bank's net worth will be approximately percent. $440 million; 10.2 $120 million; 1.2 $100 million; 11.2 $120 million; 9.2 0.1 pts Question 81 18,223 OCT 29
Macroeconomic question need help!!! Consider a bank that has assets of 100, capital of 20, and...
Macroeconomic question need help!!!
Consider a bank that has assets of 100, capital of 20, and short-term credit of 80. Among the bank's assets are securitized assets whose value depends on the price of houses. These assets have a value of 50. Assets Securitized assets Liabilities Short-term credit S 80 $50 $ 50 Other assets Net Worth Capital $20 Suppose that as a result of a housing price decline, the value of the bank's securitized assets falls by an uncertain...
Canes National Bank has $1,333 in assets and $700 in liabilities (i.e., deposits). The duration of...
Canes National Bank has $1,333 in assets and $700 in liabilities (i.e., deposits). The duration of the bank's assets is 4.2 years and the duration of the bank's liabilities is 2.7 years. What is the duration of the equity of Canes bank? Give the answer in years, with two decimals.
The balance sheet for ACME Bank is shown below. ACME Bank Balance Sheet 1 Assets Liabilities...
The balance sheet for ACME Bank is shown below. ACME Bank Balance Sheet 1 Assets Liabilities and net worth Reserves $ 107,500 Checkable $ 120,000 deposits Loans $ 28,500 Stock shares $ 290,000 Property $ 274,000 Suppose the bank decides to invest 40 percent of its excess reserves in short-term securities in order to earn interest. The bank issues a cashier's check to a securities dealer to purchase the securities. The securities dealer deposits the check into an account at...
The balance sheet for ACME Bank is shown below. ACME Bank Balance Sheet 1 Assets Liabilities...
The balance sheet for ACME Bank is shown below. ACME Bank Balance Sheet 1 Assets Liabilities and net worth Checkable deposits $ Reserves 69,500 97,000 $ 42,500 Stock shares $ Loans 220,000 $ 205,000 Property Suppose the bank decides to invest 80 percent of its excess reserves in short-term securities in order to earn interest. The bank issues a cashier's check to a securities dealer to purchase the securities. The securities dealer deposits the check into an account at a...
Suppose you are the manager of a bank whose $100 billion of assets have an average...
Suppose you are the manager of a bank whose $100 billion of assets have an average duration of four years and whose $90 billion of liabilities have an average duration of six years. Conduct a duration analysis for the bank, and show what will happen to the net worth of the bank if interest rates rise by 2 percentage points. What actions could you take to reduce the bank's interest-rate risk?
Consider the First National Bank with T-account as shown below. The First National Bank chose a...
Consider the First National Bank with T-account as shown below. The First National Bank chose a 30% reserve ratio. First National Bank Assets Liabilities Reserves Deposits $100 Loans Capital (Owners' Equity) $10 Other Assets $10 (1) How much deposits did the First National Bank keep in reserves? (2) How much deposits did the First National Bank loan out? (3) What is the leverage ratio for the First National Bank? (4) If some of the consumers and businesses who borrowed from...
Assets Cash Last National Bank Balance Sheet 1 Liabilities and net worth Checkable $ 19.000 $ 115,000 deposits $ 98,000 Stock shares 280,000 $ 278,000 S Reserves Property Instructions: Enter your answers as whole numbers. a. Suppose a depositor at the bank writes a check for $25,000 to a contractor to pay for some remodeling work done on her home. The contractor deposits the check in his bank (which is a different bank). What will last National Bank's balance sheet...
Please answer the following questions.
I put -9.20%, but it says it's wrong.
Suppose First National Bank holds $100 million in assets with an average duration of 4 years, and it holds $85 million in liabilities with an average duration of 2 years Further suppose there is a 4-percentage-point increase in interest rates. Calculate the percentage decrease in First National Bank's net worth relative to the total original asset value A 4 percentage point increase in interest rates decreases First...
Question 80 0.1pts If a bank's assets are $500 million and its liabilities are $380 million, then its net worth (bank capital) is percent at the same time that its liabilities rise by 5 percent, the percentage change in If the bank's assets then rise by 6 the bank's net worth will be approximately percent. $440 million; 10.2 $120 million; 1.2 $100 million; 11.2 $120 million; 9.2 0.1 pts Question 81 18,223 OCT 29
Macroeconomic question need help!!!
Consider a bank that has assets of 100, capital of 20, and short-term credit of 80. Among the bank's assets are securitized assets whose value depends on the price of houses. These assets have a value of 50. Assets Securitized assets Liabilities Short-term credit S 80 $50 $ 50 Other assets Net Worth Capital $20 Suppose that as a result of a housing price decline, the value of the bank's securitized assets falls by an uncertain...
The balance sheet for ACME Bank is shown below. ACME Bank Balance Sheet 1 Assets Liabilities and net worth Reserves $ 107,500 Checkable $ 120,000 deposits Loans $ 28,500 Stock shares $ 290,000 Property $ 274,000 Suppose the bank decides to invest 40 percent of its excess reserves in short-term securities in order to earn interest. The bank issues a cashier's check to a securities dealer to purchase the securities. The securities dealer deposits the check into an account at...
The balance sheet for ACME Bank is shown below. ACME Bank Balance Sheet 1 Assets Liabilities and net worth Checkable deposits $ Reserves 69,500 97,000 $ 42,500 Stock shares $ Loans 220,000 $ 205,000 Property Suppose the bank decides to invest 80 percent of its excess reserves in short-term securities in order to earn interest. The bank issues a cashier's check to a securities dealer to purchase the securities. The securities dealer deposits the check into an account at a...
Suppose you are the manager of a bank whose $100 billion of assets have an average duration of four years and whose $90 billion of liabilities have an average duration of six years. Conduct a duration analysis for the bank, and show what will happen to the net worth of the bank if interest rates rise by 2 percentage points. What actions could you take to reduce the bank's interest-rate risk?
Consider the First National Bank with T-account as shown below. The First National Bank chose a 30% reserve ratio. First National Bank Assets Liabilities Reserves Deposits $100 Loans Capital (Owners' Equity) $10 Other Assets $10 (1) How much deposits did the First National Bank keep in reserves? (2) How much deposits did the First National Bank loan out? (3) What is the leverage ratio for the First National Bank? (4) If some of the consumers and businesses who borrowed from...
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