Balance Sheet                                                           Income Statement Cash $100                                                                  Interest Income                      $400 Securities Investments           $600                           Interest Expenses                   ($150) Net Loans                               $1200                         NonInterest Income               $50 Net Premises and Equip.        $300                          NonInterest Expenses            ($100) Total Assets                           $2200                         Provision for Loan Losses     ($60) Deposits                                 $1100                         Pre Tax Net Operating Income $140 NonDeposit Borrowings     $800                            Securities Gains (Losses)       ($40) Equity Capital                        $300                           Taxes                                      ($45) Total Liabilities and Equity $2200                           Net Income                             $55  Use this information to calculate Bank`s leverage ratio Bank’s equity multiplie

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
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Balance Sheet                                                           Income Statement

Cash $100                                                                  Interest Income                      $400

Securities Investments           $600                           Interest Expenses                   ($150)

Net Loans                               $1200                         NonInterest Income               $50

Net Premises and Equip.        $300                          NonInterest Expenses            ($100)

Total Assets                           $2200                         Provision for Loan Losses     ($60)

Deposits                                 $1100                         Pre Tax Net Operating Income $140 NonDeposit Borrowings     $800                            Securities Gains (Losses)       ($40)

Equity Capital                        $300                           Taxes                                      ($45)

Total Liabilities and Equity $2200                           Net Income                             $55 

Use this information to calculate

  1. Bank`s leverage ratio
  2. Bank’s equity multiplier
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