4) To meet any shortfall in its required reserve, Mean Green Bank borrows cash from Chase bank on an overnight loan just enough to cover the reserve requirement by the Federal Reserve. Complete bank's new balance sheet below. Assets Liabilities Required Reserves Checkable Depos million Excess Reserves Bank Borrowings million Loans Bank Capital million T-Bills million %24

4) To meet any shortfall in its required reserve, Mean Green Bank borrows cash from Chase bank on an overnight loan just enough to cover the reserve requirement by the Federal Reserve. Complete bank's new balance sheet below. Assets Liabilities Required Reserves Checkable Depos million Excess Reserves Bank Borrowings million Loans Bank Capital million T-Bills million %24

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

See similar textbooks

Similar questions

NewBank started its first day of operations with$155 million in capital. A total of $92 million incheckable deposits is received. The bank makesa $28 million commercial loan and lends another$23 million in mortgage loans. If required reserves are5.4%, what does the bank balance sheet look like?
Oldhat Financial starts its first day of operations with$11 million in capital. A total of $120 million incheckable deposits are received. The bank makes a$30 million commercial loan and another $40 million in mortgages with the following terms: 200 standard,30-year, fixed-rate mortgages with a nominal annualrate of 5.25%, each for $200,000.Assume that required reserves are 8%.a. What does the bank balance sheet look like?b. How well capitalized is the bank?c. Calculate the risk-weighted assets and risk-weightedcapital ratio after Oldhat’s first day
K Oidhat Financial starts its first day of operations with $9 million in capital. A total of $140 million in checkable deposits are received. The bank makes a $30 milion commercial loan and another $50 milion in mortgages, with the following terms: 200 standard 30-year, foxed-rate mortgages with a nominal annual rate of 5.25%, each for $250,000. Assume that required reserves are 8% Complete the bank's balance sheet provided below. (Round your responses to the nearest whole number) Assets The leverage ratio is%, and the bank is Required reserves Excess reserves Loans $11 million $ 58 million $ 80 million Liabilities Checkable deposits Bank capital 1 (Round your response to two decimal places) $140 million $9 million
The Tropical State Bank has $1,000 in total assets (all of which are earning assets), $700 ofwhich will be repriced within the next 90 days. This bank also has $800 in total liabilities,$400 of which will be repriced within the next 90 days. Currently, the bank is earning 8percent on its assets and is paying 5 percent on its liabilities.If interest rates on both assets and liabilities rise by 2 percent in the next 90 days, what would be thebank's net interest margin?A. 4 percentB. 4.4 percentC. 4.6 percentD. 2.4 percent
Oldhat Financial starts its first day of operations with â$12 million in capital. A total of â$140 million in checkable deposits are received. The bank makes a â$25 million commercial loan and another â$60 million inâ mortgages, with the followingâ terms: 200 standard 30â-year, âfixed-rate mortgages with a nominal annual rate ofâ 5.25%, each for â$300, 000. Assume that required reserves are 8â%.(a) What does the bank balance sheet look like?(b) How well capitalized is the bank?
The Tidewater State Bank has $1,000 in total assets (all of which are earning assets), $700 of which will be repriced within the next 90 days. This bank also has $800 in total liabilities, $400 of which will be repriced within the next 90 days. Currently, the bank is earning 8 percent on its assets and is paying 5 percent on its liabilities. If interest rates on both assets and liabilities decrease by 2 percent in the next 90 days, what would be this bank's net interest margin? 3.4 percent 4 percent 0.4 percent 5.6 percent 2 percent
The Tropical State Bank has $1,000 in total assets (all of which are earning assets), $700 of which will be repriced within the next 90 days. This bank also has $800 in total liabilities, $400 of which will be repriced within the next 90 days. Currently, the bank is earning 8 percent on its assets and is paying 5 percent on its liabilities. If interest rates do not change in the next 90 days, what is this bank's net interest margin? 8 percent 5 percent 4 percent 4 percent The Tropical State Bank has $1,000 in total assets (all of which are earning assets), $700 of which will be repriced within the next 90 days. This bank also has $800 in total liabilities, $400 of which will be repriced within the next 90 days. Currently, the bank is earning 8 percent on its assets and is paying 5 percent on its liabilities. If interest rates on both assets and liabilities rise by 2 percent in the next 90 days, what would be the bank's net interest margin? 4 percent 4 percent 6 percent 4 percent…
The clean Bank has the following assets and liabilities as of year-end.All asset and liability item have face value of $1,000 and are priced at par.And interests and coupons are paid annually for all asset and liability items. Assets Amount($millions) Annual Rate Liabiltiies and Equity Amount($millions) Annual Rate 5-year loans 40 40% 3-year term deposit 20 4% 5-year coupon bonds 60 8% 5-year term deposit 30 8% Equity 50 Total 100 100 Please calulate the Clean Bank's maturity gap.What does the maturity gap imply about the interest risk of the bank?Will you view on the interest risk of the bank be different under duration model?Explain carefully..
In the example below, we will use year-end assets. Bank A receives $70 in deposits at 5% and, together with 40 in equity, makes a loan of $90 at 7%. The remaining of assets is G-Bond. We will ignore taxes for the moment. Bank A Cash Reserves for Deposit ? Loan 7% $90 G-Bond 5% ? Deposits 5% $70 Equity $40 Total Assets $? Total Equity and Deposit $110 If Cash Reserves for deposit is at least 8% of the deposit under the Basel Accord, how much of the G-Bond Bank A should purchase? $17 $14 $16 $18 $20 $15 $19 $21
A bank has two assets: 70 percent in one-month Treasury bills and 30 percent in real estate loans. If the bank must liquidate its T-bills today, it receives $95 per $100 of face value; if it can wait to liquidate them on maturity (in one month's time), it will receive $100 per $100 of face value. If the bank has to liquidate its real estate loans today, it receives $90 per $100 of face value liquidation at the end of one month will produce $92 per $100 of face value. The one-month liquidity index value for this bank's asset portfolio is: Select one: a. 1.10 b. 0.958 c. 0.979 d. 0.964 e. 1.06 Clear my choice
ABC Corporation has a daily collection of 180,000 from a selected foreign customer group. The bank offered to accelerate the clearing time of these collections from 8 days to 5 days for a quarterly fee of 1,000. ABC can invested freed cash into a mutual fund to earn 5% annually. How much is the net benefit/cost of this bank service?
In the example below, we will use year-end assets. Bank A receives $70 in deposits at 5% and, together with 40 in equity, makes a loan of $90 at 7%. The remaining of assets is G-Bond. We will ignore taxes for the moment. NIM=Profit/Interest revenue Bank A Loan 7% $90 G-Bond 5% ? Deposits 5% $70 Equity $40 Total Assets $? Total Equity and Deposit $110 The amount of G-bond is $50 $70 $20 $40 $80 $60 $30 $10