FINA350 Extra Credit 3

What is the reserve ratio on these financial accounting question?

a) Bank A has the following balance sheet (in millions): Assets Cash Securities Loans Total assets $70 The bank is expecting a $12 million net deposit drain. Liabilities and equity Deposits Equity Total liabilities and equity $5 10 55 $62 9 $70 ii) Show the new balance sheet if the bank uses stored liquidity management to offset the expected drain. Also, explain the effect on the size and composition of assets and liabilities.

a) Bank A has the following balance sheet (in millions): Assets Cash Securities Loans Total assets $5 10 55 $70 Liabilities and equity Deposits Equity Total liabilities and equity The bank is expecting a $12 million net deposit drain. $62 8 $70 i) Show the new balance sheet if the bank uses purchased liquidity management to offset the expected drain. Also, explain the effect on the size and composition of assets and liabilities ii) Show the new balance sheet if the bank uses stored liquidity management to offset the expected drain. Also, explain the effect on the size and composition of assets and liabilities.

Use the following balance sheet to answer questions 5-8 ($000) Cash 21 Demand Deposits 550 Securities 369 Fed Funds (Borrowings) 151 Loans 400 Equity 89 5. If the bank’s expected net deposit drain is 4%, what is the bank’s expected liquidity needs? 6. How can the bank meet an expected net deposit drain of 4%? 7. ) If the bank decides to cut down on interest expenses by reducing its dependence upon borrowed funds, what policy must the bank follow? 8. ) If the bank experience a $50,000 sudden liquidity drain, what will be the impact on the bank’s balance sheet?

If a bank has gross charge-offs of $25 for the current year, recoveries of $40, and provision for loan losses of $30, how much will the reserve for loan losses change? a. $45 b. $+15 c. none of the above. d. $-15

2. (Credit Cycles) Consider a bank with the balance sheet given below. Assets Liabilities Reserves $10 million Securities $50 million Deposits Bank Capital Loans $ 30 million $ 80 million Answer the following questions. (a) Compute the bank capital (the value of assets minus liabilities). (b) Assume that there was a default in mortgages loans by 10 million dollars worth. Draw the resulting bank balance sheet. 2 (c) Because of the decreased bank capital, the bank has to sell their assets by 10 million dollars. Suppose that it decides to sell securities. Since many other banks are in the same situation and they sold securities, too. Because of the surge of supply, the price of the securities had dropped and it caused the depreciation of bank's securities by 5 million dollars worth. Draw the resulting bank balance sheet. (d) Further Reading Similarly to this problem, an occurrence of asset deprecia- tion causes deterioration of bank balance sheet and that further causes con- traction in…

Imagine that the banking system's balance sheet can be represented by the following t-account: Assets   LIABILITIES AND NET WORTH   RESERVES 200 DEPOSITS 2000 BONDS 800     LOANS 1000 NETWORTH 0 TOTAL 2000 TOTAL 2000 Assuming the bank is "loaned up" the required reserve ratio is ___________ (round to two decimal places) The money multiplier is ___________ Imagine that the central bank uses open market operations to buy $300 worth of bonds from the bank above. Fill in the following t-account assuming that the money multiplier has taken its full effect: ASSETS   LIABILITIES AND NET WORTH   RESERVES __?___ DEPOSITS ___?__ BONDS ____?___     LOANS ____?____ NET WORTH ___?___ TOTAL _____?______ TOTAL ___?___

Suppose a bank receives a deposit of... Provide answer the financial accounting

Assume that banks holds no excess reserves and the public holds no currency: A. If a bank receives a deposit inflow of $100,000 explain (using t-accounts) what happens to this bank and one additional round in the deposit creation process assuming the reserve requirement is 8%. B. How much do deposits and loans change for the banking system when the process is completed? Show computation and the entire banking system's final T-account. C. Suppose the Central Bank sells $5 billion to ABC Bank. Determine what happens to checkable deposits of the entire banking system after the sale and completion of the multiple deposit creation process. Determine the change in checkable deposit in the banking system and show the T-account of the banking system.

what is the maximum amount of loans that the Second National Bank can make if it holds only the required reserves?

Please given answer Accounting question

The financial statements for MHM Bank (MHM) are shown below: Calculate the dollar value of MHM’s earning assets. Calculate the dollar value of MHM’s interest-bearing liabilities. Calculate MHM’s spread. Calculate MHM’s interest expense ratio.

Consider a bank with the following balance sheet Assets Liabilities Required reserves Excess reserves T-bills Commercial loans $ 9 million Checkable deposits $ million Bank capital $ 44 million $ 52 million $ 100 million $ 10 million The bank makes a loan commitment for $15 million to a commercial customer. Before the commitment, the bank's capital ratio equals%. (Round your response to two decimal places.)

Need answers for D. 1, D. 2, and D. 3

Please answer “d” and “e” below.

Provide answer general accounting

In the following, assume that the required reserve ratio is 5%. a. With T-Accounts (like the ones below), show the immediate effect of a $1000 Open Market Purchase by the Fed from a member of the public who deposits the Fed's payment into a checking account at the AAA Bank. AAA Bank Fed Fed Assets Liabilities Assets Liabilities

Use the following balance sheet to answer questions  ($000) Cash               21                    Demand Deposits                  550 Securities       369                  Fed Funds (Borrowings)      151 Loans              400                  Equity                                       89 If the bank decides to cut down on interest expenses by reducing its dependence upon borrowed funds, what policy must the bank follow?

Please help me with this.

Assume that a bank receives a deposit of $1,000 in cash, puts aside $200 as required reserves, and makes a loan of $800, these transactions imply that: the money multiplier is 10. the money multiplier is 5. the money multiplier is 4. the money multiplier is 2. the money multiplier is 2.