Bank Balance SheetAssetsLiabilities and EquityReserves $20,000 Deposits$100,000Loans95,000 Debt30,000Securities 30,000 Equity15,000Using the table above and suppose a recession causeour bank's assets to fall by 5%, dețermine the leverage ratio.O $137,750O 9.67O 9.18O 17.77

Balance sheet of Bank Liability Amount Assets Amount Deposit $ 100000 Reserve $ 20000…

Answered: Using the table above and suppose a…

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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q5- 8.2 Prove step by step working out no excel
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If the probability of a recession is 0.3, normal growth is 0.4 and a boom is 0.3, and the payoff in the event of a recession is $100, normal growth is $300 and boom is $500, what is the expected payoff? a. $300 b. $400 c. $200 d. $500
PJ Morgan Bank has bank capital equal to 10% of total assets. Most of its deposits are short-term and adjustable rate. PJ Morgan's assets are long maturity and fixed rate. What is true of the bank? |- Bank capital will fall below 10% of total assets if interest rates increase. II - Bank profits will increase if interest rates drop. III - The bank will have to borrow from the Fed if interest rates increase. IV - The bank has a positive gap. O ,Il and IV O , II, II and IV O l and Il only O , II, and IV
5- Which of the following statements about "Cash From Operations/Interest Payments" ratio is correct? a) If it is 40% or less, it is safe, an decrease in the trend analysis is a positive indicator. b) 1 and above is safe, an decrease in trend analysis is a positive indicator 3 and above is safe, an increase in trend analysis is a positive indicator d) 2 and below is safe, an increase in trend analysis is a positive indicator
If the general inflation rate is estimated to be 7.4074% and a firms money cost of capital is 16% , how do I calculate the real cost of capital?
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A6) Finance 1. What of the following statements is not correct? _____ the higher the sales growth rate g is, the larger AFN will be—other things held constant. The higher the capital intensity ratio, the larger AFN will be—other things held constant. The higher the firm’s spontaneous liabilities, the smaller AFN will be—other things held constant. The higher the payout ratio, the larger AFN will be if other things held constant.
20. Suppose that before any forward guidance was given a bank believed the FFR would have the values shown in the table below but that with forward guidance it now expects lower rates. Year before guidance w/ forward guidance 1 0% 0% 2 3% 0% 3 5% 0% I How much lower is the average FFR with forward guidance in this example? (Give your answer as a decimal, so if it changed from 5% to 3% you would enter 0.02)
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“… When the assets of the Central Bank are analyzed, one should see that there is no significant increase. This is a net indicator of the Central Bank’s tight monetary policy. In an economy where Central Bank’s balance-sheet expands almost 2%, saying that money supply increases almost 16% is just bending the truth …”is this idea true? Why or why not? Explain your answer in detail.

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Using the table above and suppose a recession causes our bank's assets to fall by 5%, dețermine the leverage ratio. O S137.750