GF510_Unit 5 Assignment 1_Andrews, Tradawnya

Balance sheet ($ million) Cash $10 50 Loans Securities 15 Deposit Equity $68 7 The bank is expecting a $15 net deposit drain. Show the bank's balance sheet if: a. The bank purchases liability to offset this expected drain. b. The bank uses the asset side liquidity to finance this expected drain.

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12 Paragraph Styles 3. Suppose you dopiest SR 5000 in currency into your checking account at a branch of Al-Rajhi Bank, which we will assume that the required reserve ration is %10. a. Use a T-account to show the initial effect of this transaction on Al-Rajhi's balance sheet. b. Suppose that Al-Rajhi Bank makes the maximum loan it can from the fund you deposited. Use a T-account to show the the initial effect of this transaction on Al- Rajhi's balance sheet. Also include in this T-account the transaction from part (a). c. Now suppose that whoever took out the loan in part (b) writes a check for this amount and that person receiving the check deposit in Alinma Bank. Use a T-account to show the the initial effect of this transaction on Alinma's balance sheet. ribility Investigate Focus

Banking Question 2 Please use the balance sheet for Bank Alpha to answer the questions. Assume Bank Alpha loans all of its excess reserves, and the assets and liabilities balance on the balance sheet. Show all work. Bank Alpha Assets Liabilities Required Reserves Checking Deposits $5,000.00 X Loans $27,000.00 Saving Deposits $25,000.00 a. How much is X, the dollar amount of reserves? b. How much is the required reserve ratio? How much is the M ? Assume Bank Alpha loans its excess reserves to Bank Beta. Next Bank Beta loans their excess reserves to Bank Gamma. Please create balance sheets for Banks Beta and Gamma. Assume there are no excess reserves in this banking system. C. d. How much total money stock created in this banking system? е. What is the total of M1 for Bank Alpha? M2?

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21' Assets Reserves Securities Loans Your bank has the following balance sheet: $ 50 million. 50 million 150 million Liabilities Checkable deposits $200 million Bank capital If the required reserve ratio is 20%, what impact would an unexpected deposit outflow of $50 million have on the bank's balance sheet? That is, what would the new balance sheet look like? Does the bank have a liquidity issue? Explain. Describetwo actions that you might recommend the bank manager take if there is an unexpected deposit outflow of $50 million? What option would you least prefer to use of all the possible actions a bank might take? 50 million.

Assume the value of a bank's average loans is $300 and the value of its average deposits is $400. The bank has liquid assets of $100. What is the bank's financing requirement? Select one: a. $300 – $400 – $100 = –$200 b. $400 – $300 = $100  c. $300 – $400 + $100 = $0 d. $400 – $300 + $100  = $200

Question 19    Examine the chart below which contains Bank 1’s balance sheet.  If the commercial bank has $300 in excess reserves, then the legal reserve requirement must be:   Assets Liabilities Total Reserves     $500 Demand Deposits $1000 Loans                  $500         Question 19 options:   a)  10%   b)  30%   c)  20%   d)  80%

Balance sheet of the Summer bank Assets Liabilities   Cash                                 $ 8,000 Deposited with the Fed   $ 6,000   Loans                               $ 116,000      Deposits $ 80,000   Capital    $ 50,000 Total                                 $ 130,000 Total          $ 130,000   The required reserve ratio (RRR) on all deposits is 8% a. What, if any, are this bank's excess reserves? b. How much new amount of loan will this bank be able to create because of the excess reserves?

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QUESTION 5 A bank with $10,000 in assets has ROA =2% and ROE =10%. What is its leverage ratio (TA/Equity)?     2.5       5           4       1.25          QUESTION 6 The expected loss of a loan is a function of the following, except     Unexpected loss         Loss given default        Exposure at default       Probability of default

QUESTION 32 LAST CHANCE BANK OF TOMBSTONE ASSETS cash in the vault: deposits at Fed US treasury bonds: loans: Building: TOTALS: --- BALANCE SHEET 32. If the reserve required ratio is 20%, how much can this bank lend? a) $900,000 b) 0 c) $500,000 d) $400,000 O e) $1,000,000 LIABILITIES & $900,000 demand deposits: $100,000 $300,000 $3,700,000 $2,000,000 capital stock: $7,000,000 TOTALS: NET WORTH $5,000,000 $2,000,000 $7,000,000

Business Math Worksheet 8.1b: Single Payment Loans Ordinary Interest = Principal x Rate x Exact Interest - Principal x Rate x Time 365 Maturity Value = Principal + Interest Owed Time 360 Name 1. Deb borrowed a single-payment loan of $8,000 at an interest rate of 10%. The term of the loan is 120 days. What is the maturity value of her loan at exact interest? 2. Carter Fenton is planning to borrow $1,600 from Christine O'Brian. He is willing to pay back in 105 days at an interest rate of 7.5% ordinary interest. What is the maturity value of his loan? 3. To purchase furniture for her new apartment, Jane Wall borrowed $4000 at 8% exact interest for 200 days. Calculate the maturity value of the loan. 4. You borrowed $85,000 at 12% ordinary interest for 30 days. Determine the maturity value of the loan

Question B bank B with explanations please

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The First Bank has total reserves of $1000, excess reserves of $800, and required reserves of $200. What is the dollar value of new loans that this bank can make? Select one: O a. $1200 O b. $800 O c. $1800 O d. $1000 O e. $200

QUESTION 7 Given the following information, what is expected loss of a $200,000 loan in percent?                                                                                     Probability of default                                     0.30% Loss given default                                         55.00%     .15%       .22%       .33%       .17%   QUESTION 8 A bank reviewed over 800 automobile loans belonging to risk category 3 borrowers. If the bank uses a confidence level of 99.25%, what is the economic capital or loan at risk of a $200,000 loan? The historical losses in ascending order is as follows:                                                                                                                 Loan                                                                                                      1              0                                                                                              2              0…

Question 8 Assume that the following banks have the same net amount of 2 million, but they are different due to the capital structure: Bank Alpha Reserves 12 million Deposits 85 million Loans 90 million Bank Capital 17 million TOTAL Assets 102 million TOTAL Liabilities and Equity 102 million Bank Beta Reserves 12 million Deposits 100 million Loans 90 million Bank Capital 2 million TOTAL Assets 102 million TOTAL Liabilities and Equity 102 million Which Bank is more attractive for shareholders? [Hints: Calculate the ROE]