The First Bank of FairfieldAssetsLiabilitiesReserves $8,000Deposits $30,000Loans $22,000If $3,000 is deposited into the First Bank of Fairfield, and if the bank has loaned out as much as itcould,a. reserves will decrease by 26.7%b. liabilities will increase by $800c. Jassets will decrease by $3,000d. loans will increase by $2,200

Bank is a financial institution which make a specified reserves on total deposits received from…

Answered: The First Bank of Fairfield Assets…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A bank makes a 5-year $75,000 loan with no principal payments in years 1-2 and principal payments of $25,000 in Years 3, 4 and 5. The interest rate is 8% and will be paid every year. What interest and principal is paid in year 4 A $6,000 + $25,000 B $6,000+$50,000 C $4,000+$25,000 D $4,000+$50,000
A new bank has vault cash of $2 million and $6 million in deposits held at its Federal Reserve District Bank.If the required reserves ratio is 9 percent, what dollar amount of deposits can the bank have?
Consider the accompanying balance sheet for a Canadian chartered bank. If an additional $1,000,000 is deposited into the bank, then the amount of new loans (beyond its existing loans) that this chartered bank could make would be $. (Enter your response as a whole number.) Assets ($000s) Liabilities Reserves 65,000 Deposits ($000s) 370,000 Desired 18,500 Advances from 0 Bank of Canada Excess Borrowings 65,000 Loans Securities 385,000 Capital 95,000 80,000 Total Assets 530,000 Total Liabilities 530,000
Q5. First National Bank has the following balance sheet and faces a required reserve ratio on deposits of 10%: Assets Reserves $50 million Securities $50 million Loans $100 million Liabilities Deposits $150 million Bank capital $50 million 1. This banks earn $10 million as an annual after-tax profit. Calculate ROA (return on asset) and ROE (return on equity) for both banks. 2. Assume that depositors withdraw $60 million and the bank experience a $30 million loans default. How should the bank balance sheet change?
SETUP FOR QUESTIONS 6: Titan Bank is a community bank and its balance sheet is reported below.[1] The "total equity/total asset ratio" is 9.91 percent ($11.00/S120.00) and is defined as the capital ratio. Assume bank regulators require the capital ratio to be at least 8.00 percent at all times. If the capital ratio falls below 8.00 percent, the bank regulators immediately shut down the bank and fire the managers. Thus, the capital ratio is very important to the managers who are constantly evaluating "what if" scenarios to make sure they are not shut down. Use Titan Bank's balance sheet to evaluate the two scenarios described below. Balance Sheet (as of 12/31/2020 and in millions) Assets Liabilities Assets have a duration of 4.00 years and a Liabilities have a duration of 1.00 years and a yield to maturity of 3.00%. yield to maturity of 6.00%. Total Assets $111.00 Total Liabilities $100.00 Equity Total Equity $11.00 Scenario 2: Federal Reserve actions force an immediate non-parallel…
A lump sum deposit of $8,000 left in the bank for 12 years at 9% compounded annually will result in an ending balance of (select the closest answer) Group of answer choices $16,640. $96,000. $11,600. $22,501. $52,938.
explain answer
Suppose that Big Bucks Bank has the simplified balance sheet shown below. The reserve ratlo Is 20 percent. Assets (1) (2) Liabilities and net worth (1) (2') Reserves 26,000 Checkable deposits $ 100,000 Securities 38,000 Loans 36,000 Instructions: Enter your answers as a whole number. a. What is the maximum amount of new loans that Big Bucks Bank can make? Using the table above, show In columns 1 and 1' how the bank's balance sheet wll appear after the bank has lent this additional amount by Inserting the new values Into the gray shaded cells of the glven table. b. By how much has the money supply changed? C. How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cleared agalnst the bank? Show the new balance sheet in columns 2 and 2' by Inserting the new values Into the gray shaded cells of the given table. d. Using the original figures, revisit questions a, b, and cbased on the assumption that the reserve ratio is now 15 percent.…
Consider a bank with the following balance sheet: Assets Required reserves $10 Excess reserves $27 Loans $70 Required reserves Excess reserves Loans million million million $ $ $ Assume that required reserves are 8%. In order to avoid insolvency, regulators decide to provide the bank with $27 million in bank capital. Assume that bad news about mortgages is featured in the local newspaper, causing a bank run. As a result, $40 million in deposits is withdrawn. Show the effects of the capital injection and bank run on the balance sheet. (Round your responses to the nearest whole number.) Assets Liabilities Checkable deposits Bank capital million million million Liabilities $120 million - $13 million Checkable deposits Bank capital $ $ million million
1. Prepare a bank reconciliation for Summer Corp. Balance per Summer Company books $500,000 Balance per Citi bank $510,000 Reconciling items Outstanding Checks $40,000 Nonsufficient funds Check $10,000 Deposits in transit $19,000 Bank Fees $1,000

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