Having the bank purchase the asset and then lease it to the customer is most often...
Having the bank purchase the asset and then lease it to the customer is most often beneficial when the customer is
A) in a higher tax bracket than the bank
B) in the same tax bracket as the bank
C) in a lower tax bracket than the bank
D) a better credit risk than the bank.
E) a poorer credit risk than the bank.
A bank's PLL is
A) the difference between interest income and interest expense.
B) the difference between noninterest income and noninterest expense.
C) a loss reserve charge to earnings for loans that may not be collectible.
D) a contra asset account used to protect equity if loans are written off.
Homework Answers
Answer : Having the bank purchase the asset and then lease it to the customer is most often beneficial when the customer is
E) a poorer credit risk than the bank.
(B)A bank's PLL is
C) a loss reserve charge to earnings for loans that may not be collectible.
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Having the bank purchase the asset and then lease it to the
customer is most often...
emy The financial statements for THE Bank are shown below: Balance Sheet THE Bank Assets Liabilities...
emy The financial statements for THE Bank are shown below: Balance Sheet THE Bank Assets Liabilities and Equity Cash Demand deposits Small time deposits Jumbo CDs Federal funds purchased Equity $ 2,490 4,840 1,465 1,040 655 240 Demand deposits from other PIs 640 Investments Federal funds sold Loans Reserve for loan losses Premises 1,840 940 6,940 (900) 790 Total assets $10,490 Total liabilities/equity $10,490 Income Statement THE Bank $2,410 1,670 90 Interest income Interest expense Provision for loan 1osses Noninterest...
1. Why are rates on credit card loans generally higher than rates on car loans? 2....
1. Why are rates on credit card loans generally higher than rates on car loans? 2. Metrobank offers one-year loans with a 6.5 percent stated or base rate, charges a 0.35 percent loan origination fee, imposes an 18 percent compensating balance requirement, and must pay an 12 percent reserve requirement to the Federal Reserve. The loans typically are repaid at maturity. a) If the risk premium for a given customer is 2.25 percent, what is the simple promised interest return...
Valley Bank has an average interest rate of 10% on %500 million of loans and securities,...
Valley Bank has an average interest rate of 10% on %500 million of loans and securities, an average interest rate of 5% on $400 million of deposits and other borrowed funds, noninterest revenue of $12 million, noninterest expense of $17 million, and a provision for loan losses of $10 million. total shareholders equity is $50 million, total assets are $500 million and the tax rate is 30%. Prepare Valley's income statement in order to answer: A. the net interest income...
Question 5 of 10 2 Points Following data pertains to Castle State Bank. Balance Sheet: Cash...
Question 5 of 10 2 Points Following data pertains to Castle State Bank. Balance Sheet: Cash 104.441, Securities 586.69, Net loans 1205.963, Net premises 295.661; Deposits 1106.707, Non-deposit borrowings 791.311, Common stock $10.88, Surplus $124.379; Income Statement: Interest Income 398.034, Interest expense 190.573, Noninterest income 50.313, Noninterest expense 103.007, Provision for loan losses 61.886, Securities gains (losses if negative) 1.417, Taxes 40.542. What is Castle State Bank's asset utilization ratio? Decimalize your answers, round to four decimals. E.g., if your...
Question 2 of 10 2 Points Following data pertains to Castle State Bank. Balance Sheet: Cash...
Question 2 of 10 2 Points Following data pertains to Castle State Bank. Balance Sheet: Cash 95.758, Securities 592.259, Net loans 1185.112, Net premises 305.343; Deposits 1101.22, Non-deposit borrowings 813.689, Common stock $10.668, Surplus $121.551; Income Statement: Interest Income 398.392, Interest expense 180.662, Noninterest income 48.061, Noninterest expense 95.603, Provision for loan losses 61.415, Securities gains (losses if negative) 14.193, Taxes 40.827. What is Castle State Bank's asset utilization ratio? Decimalize your answers, round to four decimals. E.g., if your...
Question 10 of 10 2 Points Following data pertains to Castle State Bank. Balance Sheet: Cash...
Question 10 of 10 2 Points Following data pertains to Castle State Bank. Balance Sheet: Cash 95.115, Securities 618.538, Net loans 1208.739, Net premises 297.822; Deposits 1091.188, Non-deposit borrowings 781.643, Common stock $11.329, Surplus $126.358; Income Statement: Interest Income 401.895, Interest expense 181.895, Noninterest income 48.387, Noninterest expense 98.01, Provision for loan losses 61.741, Securities gains (losses if negative) -1.769, Taxes 45.484. What is Castle State Bank's tax management efficiency ratio? Decimalize your answers, round to four decimals. E.g., if...
Question 4 of 10 2 Points Following data pertains to Castle State Bank. Balance Sheet: Cash...
Question 4 of 10 2 Points Following data pertains to Castle State Bank. Balance Sheet: Cash 103.31, Securities 580.246, Net loans 1215.587, Net premises 299.212; Deposits 1097.928, Non-deposit borrowings 792.448, Common stock $11.325, Surplus $128.81; Income Statement: Interest Income 399.612, Interest expense 186.282, Noninterest income 48.309, Noninterest expense 99.582, Provision for loan losses 62.01, Securities gains (losses if negative) -7.183, Taxes 46.239. What is Castle State Bank's tax management efficiency ratio? Decimalize your answers, round to four decimals. E.g., if...
Megalopolis Bank has the following balance sheet and income statement. For Megalopolis, calculate: Return on...
Megalopolis Bank has the following balance sheet and income
statement.
For Megalopolis, calculate:
Return on equity
Return on assets
Asset utilization
Equity multiplier
Profit margin
Interest expense ratio
Provision for loan loss ratio
Noninterest expense ratio
Tax ratio
Balance Sheet (in millions) Assets Liabilities and Equity Cash and due Demand from banks $ 9,000 deposits $ 19,000 Investment securities 23,000 NOW accounts 89,000 Repurchase agreements 42,000 Retail CDs 28,000 Loans 90,000 Debentures 19,000 Fixed assets 15,000 Total liabilities $155,000...
Dudley Bank has the following balance sheet and income statement. page 412 Income Statement Interest on...
Dudley Bank has the following balance sheet and income
statement.
page 412
Income Statement
Interest on fees and loans $6,715
Interest on repurchase agreements 143
Interest on other investment securities 1,705
Interest on deposits in banks 60
Total interest income $8,623
Interest on deposits 3,018
Interest on debentures 1,140
Total interest expense $4,158
Net interest income $4,465
Provision for loan losses 200
Noninterest income. 950
Noninterest expenses 1,720
Income before taxes $3,495
Taxes 1,220
Net income 2275. For Dudley Bank,...
QUESTION 25 Read the questions carefully and match the most appropriately Column A to Column Fed...
QUESTION 25 Read the questions carefully and match the most appropriately Column A to Column Fed funds purchased is an example of A noninterest income along with Eurodollar borrowings Net interest income - The short-term securities of the bank, including T-Bills and commercial C ondeposit borrowings paper, are often called because they are D NOW accounts the second line of defense to meet demands for cash secondary reserves a noncash expense on the bank's income Report of Income income statement...
emy The financial statements for THE Bank are shown below: Balance Sheet THE Bank Assets Liabilities and Equity Cash Demand deposits Small time deposits Jumbo CDs Federal funds purchased Equity $ 2,490 4,840 1,465 1,040 655 240 Demand deposits from other PIs 640 Investments Federal funds sold Loans Reserve for loan losses Premises 1,840 940 6,940 (900) 790 Total assets $10,490 Total liabilities/equity $10,490 Income Statement THE Bank $2,410 1,670 90 Interest income Interest expense Provision for loan 1osses Noninterest...
1. Why are rates on credit card loans generally higher than rates on car loans? 2. Metrobank offers one-year loans with a 6.5 percent stated or base rate, charges a 0.35 percent loan origination fee, imposes an 18 percent compensating balance requirement, and must pay an 12 percent reserve requirement to the Federal Reserve. The loans typically are repaid at maturity. a) If the risk premium for a given customer is 2.25 percent, what is the simple promised interest return...
Question 5 of 10 2 Points Following data pertains to Castle State Bank. Balance Sheet: Cash 104.441, Securities 586.69, Net loans 1205.963, Net premises 295.661; Deposits 1106.707, Non-deposit borrowings 791.311, Common stock $10.88, Surplus $124.379; Income Statement: Interest Income 398.034, Interest expense 190.573, Noninterest income 50.313, Noninterest expense 103.007, Provision for loan losses 61.886, Securities gains (losses if negative) 1.417, Taxes 40.542. What is Castle State Bank's asset utilization ratio? Decimalize your answers, round to four decimals. E.g., if your...
Question 2 of 10 2 Points Following data pertains to Castle State Bank. Balance Sheet: Cash 95.758, Securities 592.259, Net loans 1185.112, Net premises 305.343; Deposits 1101.22, Non-deposit borrowings 813.689, Common stock $10.668, Surplus $121.551; Income Statement: Interest Income 398.392, Interest expense 180.662, Noninterest income 48.061, Noninterest expense 95.603, Provision for loan losses 61.415, Securities gains (losses if negative) 14.193, Taxes 40.827. What is Castle State Bank's asset utilization ratio? Decimalize your answers, round to four decimals. E.g., if your...
Question 10 of 10 2 Points Following data pertains to Castle State Bank. Balance Sheet: Cash 95.115, Securities 618.538, Net loans 1208.739, Net premises 297.822; Deposits 1091.188, Non-deposit borrowings 781.643, Common stock $11.329, Surplus $126.358; Income Statement: Interest Income 401.895, Interest expense 181.895, Noninterest income 48.387, Noninterest expense 98.01, Provision for loan losses 61.741, Securities gains (losses if negative) -1.769, Taxes 45.484. What is Castle State Bank's tax management efficiency ratio? Decimalize your answers, round to four decimals. E.g., if...
Question 4 of 10 2 Points Following data pertains to Castle State Bank. Balance Sheet: Cash 103.31, Securities 580.246, Net loans 1215.587, Net premises 299.212; Deposits 1097.928, Non-deposit borrowings 792.448, Common stock $11.325, Surplus $128.81; Income Statement: Interest Income 399.612, Interest expense 186.282, Noninterest income 48.309, Noninterest expense 99.582, Provision for loan losses 62.01, Securities gains (losses if negative) -7.183, Taxes 46.239. What is Castle State Bank's tax management efficiency ratio? Decimalize your answers, round to four decimals. E.g., if...
Megalopolis Bank has the following balance sheet and income
statement.
For Megalopolis, calculate:
Return on equity
Return on assets
Asset utilization
Equity multiplier
Profit margin
Interest expense ratio
Provision for loan loss ratio
Noninterest expense ratio
Tax ratio
Balance Sheet (in millions) Assets Liabilities and Equity Cash and due Demand from banks $ 9,000 deposits $ 19,000 Investment securities 23,000 NOW accounts 89,000 Repurchase agreements 42,000 Retail CDs 28,000 Loans 90,000 Debentures 19,000 Fixed assets 15,000 Total liabilities $155,000...
Dudley Bank has the following balance sheet and income
statement.
page 412
Income Statement
Interest on fees and loans $6,715
Interest on repurchase agreements 143
Interest on other investment securities 1,705
Interest on deposits in banks 60
Total interest income $8,623
Interest on deposits 3,018
Interest on debentures 1,140
Total interest expense $4,158
Net interest income $4,465
Provision for loan losses 200
Noninterest income. 950
Noninterest expenses 1,720
Income before taxes $3,495
Taxes 1,220
Net income 2275. For Dudley Bank,...
QUESTION 25 Read the questions carefully and match the most appropriately Column A to Column Fed funds purchased is an example of A noninterest income along with Eurodollar borrowings Net interest income - The short-term securities of the bank, including T-Bills and commercial C ondeposit borrowings paper, are often called because they are D NOW accounts the second line of defense to meet demands for cash secondary reserves a noncash expense on the bank's income Report of Income income statement...
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