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4. Suppose that a bank has the following balance sheet (market values, USD billions) Assets Liabilities...
Use the following information for questions a) – f). Bank Assets Risk Weight Bank Liabilities Cash...
Use the following information for questions a) – f). Bank Assets Risk Weight Bank Liabilities Cash and Treasury Securities $8,000 0% Deposits $32,000 Municipal Bonds $6,000 20% Hot Money $25,000 Repurchase Agreements $4,000 20% Subordinated Debt $1,000 CMOs $10,000 50% Common Stock $1,000 Single Family Home Mortgage $15,000 50% Surplus $1,200 Commercial Loans $10,000 100% Retained Earnings $1,800 Agriculture Loans $5,000 100% Allowance for Loan Loss ($3,000) 0% Bank Buildings 7,000 100% Total $62,000 $62,000 How much Tier 1 capital...
4. Suppose a bank currently has the following T-Account (all values in USD) : Assets Liabilities...
4. Suppose a bank currently has the following T-Account (all values in USD) : Assets Liabilities + Net worth Loans 210,000 Deposits Government Securities 20,000 Cash Reserves ? Net worth 200,000 ? a. Assuming required reserves of 10% are met exactly by this bank, how much are their cash reserves? b. Assuming required reserves of 10% are met exactly by this bank, how much is its net worth? c. What is the bank's equity multiplier? d. If, in the next...
4. Suppose a bank currently has the following T-Account (all values in USD) : Assets Liabilities...
4. Suppose a bank currently has the following T-Account (all values in USD) : Assets Liabilities + Net worth Loans 210,000 Deposits Government Securities 20,000 Cash Reserves ? Net worth 200,000 a. Assuming required reserves of 10% are met exactly by this bank, how much are their cash reserves? b. Assuming required reserves of 10% are met exactly by this bank, how much is its net worth? C. What is the bank's equity multiplier? d. If, in the next year,...
“Third Bank” has the following balance sheet (in millions of dollars) with the risk weights in...
“Third Bank” has the following balance sheet (in millions of dollars) with the risk weights in parentheses. ASSET cash (0%) $20 interbank deposit with aa rated banks (20%) $25 Standard residential mortgages non- insured with LVR of 85 % (50%) $70 Business loans to BB rated borrowers (100%) $70 Total $185 Liabilities a equity Deposit $175 Subordinated debt (5 years) (Tier 2 capital) $3 Cumulative perference shares (Tier 1) $5 Common Equity (Tier 1) $ 2 Total $185 In addition,...
Your bank has the following balance sheet: Assets Liabilities (unit in million)
Your bank has the following balance sheet: Assets Liabilities (unit in million) Reserves $50 Checkable deposits $200 Securities 50 Loans 150 Bank capital 50 b) If there is an unexpected deposit outflow of $50 million, what is the immediate effect on the balance sheet (fill in numbers in the blank)? Is there liquidity risk? Assets Liabilities Reserves $_____ Checkable deposits $________ Securities _____ Loans _____ Bank capital ____
(6 points) 3. The bank you own has the following balance sheet Liabilities with current interest rate Assets with...
(6 points) 3. The bank you own has the following balance sheet Liabilities with current interest rate Assets with current interest rate $5million $20 million Variable: 1% Checking Fixed: 0% Reserves deposits Savings Deposits $25 million Fixed: 2% $10 million Variable: 2% Government Securities Variable: 3 % $10 million Money Market Deposit Accounts $35 million Fixed: 6% Mortgage Loans Bank Capital To be To be $10 million Variable: 7% Short-Term determined determined Loans Business $20 million Fixed: 9% Loans $80...
The following is an extract from the asset side of the balance sheet of the commercial...
The following is an extract from the asset side of the
balance sheet of the commercial bank
a) what is the total of the banks risk weighted
assets
b) the bank has K35 000 in tier 1 capital
. does the bank meet it's primary regulatory capital
requirements
c) The banks Tier 2 capital amounts to K20, 000.
what is the total capital adequacy position of the bank
M uid Asset Kwacha Treasury Bills 100.000 Interbank Loans 500,000 Mortgages 400,000...
Consider the following Bank balance sheet (assume Reserve Requirement Ratio is zero) Liabilities Assets Excess Reserves...
Consider the following Bank balance sheet (assume Reserve Requirement Ratio is zero) Liabilities Assets Excess Reserves +10M Deposits +100M Government Bonds £20M Loans Ł80M Bank Capital +10M a. Suppose interest rate on loans and government bonds is 10%, interest rate on deposits is 8%, and interest rate on excess reserves is 0%. What is the Bank's net return on assets? Compute the return on equity. b. Suppose the risk weights imposed by the bank regulator on loans, securities, and reserves...
Consider a bank with the following balance sheet: Assets Liabilities Required Reserves $ 8 million Checkable...
Consider a bank with the following balance sheet: Assets Liabilities Required Reserves $ 8 million Checkable Deposits $100 million Excess Reserves $ 3 million Bank Capital $ 6 million T-bills $45 million Commercial Loans $50 million Calculate the bank’s risk-weighted assets.
A U.S. based commercial bank has the following assets: $150 million in U.S. Treasury securities (0...
A U.S. based commercial bank has the following assets: $150 million in U.S. Treasury securities (0 percent risk-weight category), $450 million in Fannie Mae (FNMC) mortgage backed securities (20 percent risk-weight category), $900 million in home mortgages (50 percent risk-weight category), and $1100 million in commercial loans (100 percent risk-weight category). This bank has $98 million in Tier 1 capital (e.g., common and preferred equity) and $46 million in Tier 2 capital (e.g., ALL, subordinated debt, etc). Based on the Basel...
4. Suppose a bank currently has the following T-Account (all values in USD) : Assets Liabilities + Net worth Loans 210,000 Deposits Government Securities 20,000 Cash Reserves ? Net worth 200,000 ? a. Assuming required reserves of 10% are met exactly by this bank, how much are their cash reserves? b. Assuming required reserves of 10% are met exactly by this bank, how much is its net worth? c. What is the bank's equity multiplier? d. If, in the next...
4. Suppose a bank currently has the following T-Account (all values in USD) : Assets Liabilities + Net worth Loans 210,000 Deposits Government Securities 20,000 Cash Reserves ? Net worth 200,000 a. Assuming required reserves of 10% are met exactly by this bank, how much are their cash reserves? b. Assuming required reserves of 10% are met exactly by this bank, how much is its net worth? C. What is the bank's equity multiplier? d. If, in the next year,...
(6 points) 3. The bank you own has the following balance sheet Liabilities with current interest rate Assets with current interest rate $5million $20 million Variable: 1% Checking Fixed: 0% Reserves deposits Savings Deposits $25 million Fixed: 2% $10 million Variable: 2% Government Securities Variable: 3 % $10 million Money Market Deposit Accounts $35 million Fixed: 6% Mortgage Loans Bank Capital To be To be $10 million Variable: 7% Short-Term determined determined Loans Business $20 million Fixed: 9% Loans $80...
The following is an extract from the asset side of the
balance sheet of the commercial bank
a) what is the total of the banks risk weighted
assets
b) the bank has K35 000 in tier 1 capital
. does the bank meet it's primary regulatory capital
requirements
c) The banks Tier 2 capital amounts to K20, 000.
what is the total capital adequacy position of the bank
M uid Asset Kwacha Treasury Bills 100.000 Interbank Loans 500,000 Mortgages 400,000...
Consider the following Bank balance sheet (assume Reserve Requirement Ratio is zero) Liabilities Assets Excess Reserves +10M Deposits +100M Government Bonds £20M Loans Ł80M Bank Capital +10M a. Suppose interest rate on loans and government bonds is 10%, interest rate on deposits is 8%, and interest rate on excess reserves is 0%. What is the Bank's net return on assets? Compute the return on equity. b. Suppose the risk weights imposed by the bank regulator on loans, securities, and reserves...
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