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Model Bank has total assets of $100 million, and shareholders' funds (capital) of $9 million and it has made provisions according to its policy of making provisions for bad debts equal to the long-term average bad-debt rate - this is 1% of total assets. (a) What are Model Bank's (i) expected losses (in $)? (ii) simple capital ratio (in %)? (b) At the end of the accounting period Model Bank finds that in fact it has made losses due to bad debts of $1.5 million. What were Model Bank's unexpected losses (in$?

Model Bank has total assets of $100 million, and shareholders' funds (capital) of $9 million and it has made provisions according to its policy of making provisions for bad debts equal to the long-term average bad-debt rate - this is 1% of total assets. (a) What are Model Bank's (i) expected losses (in $)? (ii) simple capital ratio (in %)? (b) At the end of the accounting period Model Bank finds that in fact it has made losses due to bad debts of $1.5 million. What were Model Bank's unexpected losses (in$?

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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2 Model Bank has total assets of $100 million, and shareholders' funds (capital) of $9 million and it has made provisions according to its policy of making provisions for bad debts equal to the long-term average bad-debt rate - this is 1% of total assets. (a) What are Model Bank's (i) expected losses (in $)? (ii) simple capital ratio (in %)? (b) At the end of the accounting period Model Bank finds that in fact it has made losses due to bad debts of $1.5 million. What were Model Bank's unexpected losses (in $)?
Transcribed Image Text:2 Model Bank has total assets of $100 million, and shareholders' funds (capital) of $9 million and it has made provisions according to its policy of making provisions for bad debts equal to the long-term average bad-debt rate - this is 1% of total assets. (a) What are Model Bank's (i) expected losses (in $)? (ii) simple capital ratio (in %)? (b) At the end of the accounting period Model Bank finds that in fact it has made losses due to bad debts of $1.5 million. What were Model Bank's unexpected losses (in $)?
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