method.edited

Provide the formulas to calculate the following items from a company's financial statement: 1. Cash Position Indicator2. Liquid Securities Indicator3. Net Fed Funds and Repurchase Agreements Indicator4. Capacity Indicator5. Pledged Securities Ratio6. Hot Money Ratio7. Core Deposit Ratio8. Deposit Composition Ratio9. Loan Commitments Ratio

Consider a bank with the following balance sheet (Shown in image):a) Calculate the equity (total asset – total liability) to asset ratio of the bank(Hint: equity to asset ratio = total equity/total asset) b) Calculate the duration and convexity of the both asset and liability sides; c) If the interest rates go up by 1%, using the duration and convexity rule to determine the networth of the bank and the equity to asset ratio; d) In c)’s scenario, to maintain the equity to asset ratio at 40% which is required by the regulation,the bank decides to raise cash (zero duration and zero convexity) from the equity holders.How much cash does the bank need to raise? e) Do you agree with the following statement? Explain why. “The information about a bond’s duration and convexity adjustment is sufficient to quantifyinterest rate risk exposure.”

a)Calculate the equity (total asset –total liability) to asset ratio of the bank (Hint: equity to asset ratio = total equity/total asset) b)Calculate the duration and convexity of the both asset and liability sides; c)If the interest rates go up by 1%, using the duration and convexity ruleto determine the net worth of the bank and the equity to asset ratio;  d)In c)’s scenario, to maintain the equity to asset ratio at 40% which is required by the regulation, the bank decides to raise cash (zero duration and zero convexity) from the equity holders. How much cash does the bank need to raise? e)Do you agree with the following statement? Explain why.“The information about a bond’s duration and convexity adjustment is sufficient to quantify interest rate risk exposure.” please can you answer part d and e

a)Calculate the equity (total asset –total liability) to asset ratio of the bank (Hint: equity to asset ratio = total equity/total asset) b)Calculate the duration and convexity of the both asset and liability sides; c)If the interest rates go up by 1%, using the duration and convexity rule to determine the net worth of the bank and the equity to asset ratio; d)In c)’s scenario, to maintain the equity to asset ratio at 40% which is required by the regulation, the bank decides to raise cash (zero duration and zero convexity) from the equity holders. How much cash does the bank need to raise? e)Do you agree with the following statement? Explain why.“The information about a bond’s duration and convexity adjustment is sufficient to quantify interest rate risk exposure.”

The financial statements for BSW National Bank (BSWNB) are shown below:  What is the dollar value of earning assets held by BSWNB? What is the dollar value of interest-bearing liabilities held by BSWNB? What is BSWNB’s total operating income? Calculate BSWNB’s asset utilization ratio. Calculate BSWNB’s net interest margin.

The current ratio is O a solvency measure that indicates the margin of safety for bondholders O calculated by dividing current liabilities by current assets calculated by subtracting current liabilities from current assets O used to evaluate a company's liquidity and short-term debt-paying ability Question 19 On the statement of cash flows, a $9,000 gain on the sale of fixed assets would be O added to net income in converting the net income reported on the income statement to cash flows from operating activities O deducted from net income in converting the net income reported on the income statement to cash flows from operating activities O deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends O added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends

Which of the following is a potential source of capital for a company to invest in long-term assets? Select one: A. Bank loans B. Net Income from past years C. Issuing additional common stock D. Issuing bonds E. All of the above

The ratio of liabilities to stockholders' equity measures how much of the company is financed by debt and equity. It is computed as follows: To illustrate, the ratio of liabilities to stockholders' equity for Lincoln Company is computed as follows                         Current Assets - CurrentLiabilities = Calculated Value   1. Working capital:                                      Ratio   Numerator ÷ Denominator = Calculated Value                     2. Current ratio                                    3. Quick ratio                                    4. Accounts receivable               turnover                                    5. Number of days'               sales in receivables                                  6. Inventory turnover                                  7. Number of days'               sales in inventory                                  8. Ratio of Fixed assets to               long-term liabilities…

1. The leverage ratio is the proportion of debts that a bank has compared to its equity/capital.   Please answer one that is most correct   Select one: a. Debt to Equity = Total debt / Shareholders Equity. b. Debt to Capital = Total debt / Capital (debt+equity) c. There are different leverage ratios such as. Debt to Equity = Total debt / Shareholders Equity. Debt to Capital = Total debt / Capital (debt+equity) Debt to Assets = Total debt / Assets.   2. Which of the following amortization methods is most likely to evenly distribute the cost of an intangible asset over its useful life? Select one: a. Units-of-production method. b. Straight-line method. c. Double-declining balance method   3. What ratio is a cash and marketable securities based (it removes Inventory) ? Select one: a. Quick Ratio b. Current Ratio c. Dupont Analysis set of ratios   4. Which of the following is an appropriate method of computing free cash flow to the firm?  Select one: a. Add operating cash flows to…

a) Consider the financial ratios of ABK Bank and the average ratios of peer banks based on 2015 year-end data shown in the table below: Ratios ABK Bank Peer Banks Return on equity (ROE) 14.50% 7.40% Return on assets (ROA) Asset utilisation (AU) Expense ratio (ER) 1.68% 0.85% 6.65% 5.50% 4.95% 4.62% TAX 0.02% 0.03% Note that TAX = applicable income tax/total assets Compare and critically discuss the performance of ABK Bank and that of its peer banks. Conduct a return on equity decomposition analysis for ABK bank and the peer banks as part of your discussion. What are the possible limitations in your analysis?

30. The statement of financial position contributes to financial reporting by providing a basis for all of the following except * b. evaluating the capital structure of the enterprise. a. computing rates of return. c. determining the increase in cash due to operations. d. assessing the liquidity and financial flexibility of the enterprise 31.In a statement of cash flows, interest payments to lenders and other creditors should be classified as cash outflows for * b. borrowing activities. d. financing activities.   Option 1 c. lending activities. a. operating activities. 32. In a statement of cash flows, proceeds from issuing equity instruments should be classified as cash inflows from * d. financing activities. a. lending activities.   b. operating activities.   c. investing activities. 33.On the statement of cash flows, which of the following items will…

The _____ ratio gives actual losses on loans, while the ______ ratio gives the extent to which the bank’s assets are devoted to loans. a. loss rate; capitalization b. loss rate; loan risk c. loan risk; loss rate d. operating efficiency; loan risk