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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.”

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 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…

How would you interpret the Tier 1 Leverage Ratio for these 3 banks? What do these ratios mean? Bank A 8.37%; Bank B 10.70%; Bank C 10.57% 2. How would you interpret the Cost of Funds (CoF) for these 3 banks? What do these percentages mean? Bank A 21.32%; Bank B 7.21%; Bank C 123.89%

National Bank has the following balance sheet (in millions) and has no off-balance-sheet activities:                  a)What is leverage ratio? b)What is the Tier I capital ratio? c) What is the total risk-based capital ratio? d) In what capital category would the bank be placed?

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 $ 153.7   1.0 %   Deposits $ 10,273.3   67.7 % Other real estate   28.9   0.2     Debt and other borrowed funds   963.0   6.3   Total real assets $ 182.6   1.2 %   Federal funds and repurchase agreements   985.0   6.5                 Other   912.0   6.0                 Total liabilities $ 13,133.3   86.6 %                           Financial assets                         Cash $ 882.3   5.8 %               Investment securities   5,032.1   33.2                 Loans and leases   6,663.3   43.9                 Other financial assets   1,207.2   8.0                 Total financial assets $ 13,784.9   90.8 %               Other assets                         Intangible assets $ 419.4   2.8 %               Other   786.7   5.2…

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

Which of the following is defined as the level of capital that allows banks to sustain the potential losses arising from all current risks and to comply with an acceptable solvency level. a. Asset liquidity b. Capital adequacy c. Liquidity position of a bank d. Market liquidity

Use the return on equity (ROE) and return on assets (ROA)) to measure and compare the financial performance of both of the following institutions below which are banks. ACB Company Ratios for the period 2017-2022 Years 2017 2018 2019 2020 2021 2022 ROA ratio 1.74% 1.62% 1.62% 0.26% 2.24% 0.35% ROE ratio 10% 9.03% 8.5% 1.44% 15.68% 2.58% ECAB- Company Ratios for the period 2017-2022 Years 2017 2018 2019 2020 2021 2022 ROA 1.71% 1.53 ratio % 1.97 % 1.46 % 0.72% 0.28% ROE ratio 10.19 8.9% 11.21 8.52 7.74% 3.25% % % %

If a bank has the following ratios, it can pay up to of its earnings as dividends. Tier 1 leverage = 4.7% Tier 1 common equity risk-based = 7.2% %3D Tier 1 risk-based 8.3% Total capital risk-based = 11%

What are the three main types of markets for financial capital? The three main types of markets for financial capital are OA. bond markets, stock markets, and commercial banks OB. investment banks, commercial banks, and insurance companies OC. loan markets, bond markets, and commercial banks OD. loan markets, bond markets, and stock markets

Calculate the following ratios based on the balance sheet, income statement and cash flow prepared in question ROE Return on Capital Employed (post-tax) Net Profit Margin EBITDA Margin Effective Tax Rate Operating Cost Ratio Gross Profit Margin Total Asset Turnover Ratio Fixed Asset Turnover Ratio Receivables Turnover Ratio Leverage Ratio [Avg. Total Assets / Avg. Total Equity] FCF / EBITDA Interest Coverage Ratio Debt Service Coverage Ratio Basic EPS (Assume Face Value of each share is INR 10) Debt : Equity Ratio Income Statement (INR Cr)   Units Mar/14 Saleable Units          4,570 Revenues       Gross Revenues   INR Cr      2,116 Less: Environment Cess   INR Cr            5 Net Revenues   INR Cr      2,121 Growth (%)     -1.9%         Expenses       O&M Expenses (% of Project Costs)   INR Cr         146 YoY Escalation     5.72%         EBITDA   INR Cr      1,974 Margin (%)     93.1% Book Depreciation   INR Cr         439 Interest Expenses   INR…

What are the ways in which a bank can increase its capital adequacy ratio?

Definition of size ratio and growth ratio for comparing between Banks