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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Mi Tierra Bank Assets Liabilities Required reserves Excess reserves $10,000 Demand deposits $5,000 S85,000 Owner's equity $100,000 Loans (d) Assume that Luis withdraws $5,000 in cash from his checking account at Mi Tierra Bank. (iii) What is the maximum change in the amount of money supply as a result of this withdrawal?
A bank has three assets. It has $75 million invested in consumer loans with a three-year duration, $39 million invested in T-bonds with a 16-year duration, and $39 million in six-month maturity T-bills. What is the duration of the bank's asset portfolio in years? Group of answer choices 11.51 years 7.38 years 3.95 years 5.68 years
5
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Assets Liabilities & Equity S (000) S (000) Cash Savings 10,000 85,000 deposits Investments 50,000 55,000 105,000 Fixed deposits Loans Equity 40,000 Other 15,000 Total Liab. & Equity Total Assets 180,000 180,000 The Savings Bank (CB) has been in operations for the past twenty five years. Due to the small operation, the growth of the bank has been very low. Approximately 30% of the loans are fixed rate and the other 70% are floating. The income on the loan portfolio is 8%. The investments are a mixture of equities (50%) and bonds (50%). The income on the equities average 10%. The bonds are fixed at 7% and duration of 5. They are non-callable with an average maturity of 8 years. The fixed deposits are all one year maturities with an average interest at 3%. The savings account pays 1%. You have recently joined the bank and your supervisor is preparing his report for the asset liability management committee and is seeking your help in answering the following questions: A What was the net…
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?
The Central Bank requires banks to maintain a 10% legal minimum reserve requirement of their deposits. Bank A with total deposits of $100 million isfully loaned up. This means that Bank A has excess reserves of A. 0 B. $10 million C. $1,000 million
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.
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

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