Below is Econbank's balance sheet. Assets Liabilities and Owners' Equity Reserves $100 Deposits $800 Loans $600 Debt $280 Securities $500 Capital (owners' equity) $120 a. Calcualte the bank's total assets. b. Calculated the bank's total liabilities. c. Calculate the bank's reserve-deposit ratio. d. Calculate the bank's leverage ratio. e. If the value of the bank's securities rises by 24%, by what percentage does the bank assets rise? By what percentage does the bank capital rise? Draw the new balance sheet of the bank. f. How large a decline in the value of bank assets would it take to reduce the bank's capital to zero?

Below is Econbank's balance sheet. Assets Liabilities and Owners' Equity Reserves $100 Deposits $800 Loans $600 Debt $280 Securities $500 Capital (owners' equity) $120 a. Calcualte the bank's total assets. b. Calculated the bank's total liabilities. c. Calculate the bank's reserve-deposit ratio. d. Calculate the bank's leverage ratio. e. If the value of the bank's securities rises by 24%, by what percentage does the bank assets rise? By what percentage does the bank capital rise? Draw the new balance sheet of the bank. f. How large a decline in the value of bank assets would it take to reduce the bank's capital to zero?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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