Please correct answer and don't use hand rating 2.6. Determine the following:2.6.1.Herfindahl-Hirschman index (HHI) with the following information of the six banks'deposits;2.6.2.If the biggest and smallest bank (in terms of deposits) merge, what will be the HHI forall the remaining banks? |2.6.3. Will the merger be allowed? (Ch. 9)ABCBank($ in millions)708090D120E140F200

A Herfindahl-Hirschman Index (HHI) of 1906.13 indicates a moderately concentrated market, according…

Answered: 2.6. Determine the following:…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 8P

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Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system. All figures are in billions. The reserve ratio is 25 percent. a. What amount of excess reserves does the commercial banking system have? What is the maximum amount the banking system might lend? Show in column 1 how the consolidated balance sheet would look after this amount has been lent. What is the monetary multiplier?b. Answer the questions in part a assuming the reserve ratio is 20 percent. Explain the resulting difference in the lending ability of the commercial banking system.
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If a bank quintuples the amount of its capital and ROA stays constant, what will happen to ROE? ROE will to of what the ROE was before the bank quintupled the amount of its capital. 500.0% 50.0% 20.0%
| Suppose that FirstBank has the following simplified balance sheet. Assume that all other components of the balance sheet are equal to zero. Assets Liabilities reserves 3,920 demand deposits 32,000 loans 28,080 32,000 32,000 Assume that the reserve ratio is r= .10 (10%). a. Does FirstBank have excess reserves? If so, of how much? b. Suppose that FirstBank desires to hold no excess reserves, so it loans out its excess reserves to borrowers. How does the balance sheet change? Either use T-accounts or a new balance sheet to show. c. Starting back in a), what is the maximum deposit outflow that FirstBank can sustain without affecting other parts of the balance sheet?
FOLLOW THE FORMULAS GIVEN ABOVEDOWNVOTE IF YOU DONT FOLLOW THE FORMULAS
Answer the following questions regarding the balance sheet given below. Assume £1 = $1.40. a) Is this bank net short or net long? b) What is the net interest income (NII) if the value of the £ appreciates to $1.65? c) What is the net interest margin (NIM) if the value of the £ depreciates to $1.15? Liabilities and Equity $800M in USD $200M in GBP Assets $300M in USD $700M in GBP Country US UK Deposit Rate 6% 8% Lending Rate 7% 9%
Question 1) 니01K 12.t where m=1+7 B(t) =d() 12 m-l a) Mutual fund is carning an APR of What monthly deposit d is needed for a balnce 'of 2million dollars in 40years? Show work.
Which of the following is not considered part of M2? a. money market mutual fund shares b. large time deposits of more than $100,000 c. small time deposits of less than $100,000 d. savings deposits
7. If company A has current ratio of 1.3 while company B has a current ratio of 2.3, which is a better company? 8. Which ratio is more relevant - quick ratio or current ratio? 9. What other factors would a bank or supplier look into in deciding whether to lend short term credit?
A)What is the amount of RSA, RSL and the income gap amount? B) Calculate the duration gap. C)What is the change in this bank’s net income if the interest rises by 1%, does it go up or does it go down? Show work D) What happens when the interest rises by 1% to this bank’s asset value, liability value and the net worth in dollar amounts? Show work.
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Question 1) 401K where m= | + BCE) =d (), 12.t m-1 la) Mutual fund is earning an APR of 9%. (r=.09). What monthly deposit d is needed for a balance 'of 2million dollars in 40years? Show work. b) Assume uour mutual fund is eaning an APR of 107. (r=10). What monthly deposit d is needed for a balance of 2million dollars in 4Ouears? C) Assume your mutual fund is earning an APR of 11% (F=.l1). What monthly deposit is needed for a balance of 2million dollars in 40uears?

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