Assets Liabilities Reserves $ 200 Deposits $800 Loans $700 Debt $100 Securities $ 100 Capital $100 Refer to the same T-account. By how much do the assets need to cepreciate for the bank to go insolvent? a.more than 5% b.more than T0R6 Oc.more than 8%6

Assets Liabilities Reserves $ 200 Deposits $800 Loans $700 Debt $100 Securities $ 100 Capital $100 Refer to the same T-account. By how much do the assets need to cepreciate for the bank to go insolvent? a.more than 5% b.more than T0R6 Oc.more than 8%6

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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12. The Bank of Greater Pittsburg has the balance sheet listed on the right if it has to write off $26 million in loans is it solvent or insolvent (please explain your answer). Reserves Loans Securities Assets $200M Depostis $500M Debt $200M Capital Liabilities $750M $125M $25M
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F2
2. Your bank has the following balance sheet: Assets Reserves Securities Loans Liabilities Checkable deposits $200 million Bank capital 50 million If the required reserve ratio is 10%, what actions should the bank manager take if there is an unexpected deposit outflow of $50 million? Make sure to show your work. $50 million 50 million 150 million
Am. 113.
7
Risk Weight Bank Liabilities $ Bank Assets Cash and Treasury Securities Repurchase Agreements Municipal Bonds Single Family Home Mortgages $ 2,700 CMOS Commercial Loans Agricultural Loans Allowance for Loan Loss Bank Buildings Total $ 2,000 $ 1,000 $ 1,500 0% Deposits 20% Hot Money 20% Subordinated Debt 8,000 2$ 6,000 24 250 50% Common Stock 2$ 100 $ 2,500 $ 1,500 $ 2,100 $ (300) $ 2,000 $ 15,000 50% Surplus 100% Retained Earnings 2$ 300 2$ 350 100% 0% 100% 2$ 15,000 1. Calculate the minimum leverage capital for this bank.
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