What are the bank’s total risk-weighted assets? National Commercial Bank reports the following items on itsbalance sheet: cash RO 200 million; government securities RO 150million; customer deposits RO 10o million; residential real-estateloans RO 300 million, and private loans RO 350 million. Its off-balance-sheet items include: standby credit letters RO 30 million andlong-term credit commitments to corporations, RO 160 million.1) What are the bank's total risk-weighted assets?00sonRISK WEICHTSon balance sheetCash0%Government Securities0%Deposits at domestic banks20%Residential Real Estate Loanss0%Loans to private companiesoff balance sheet100%Long term credit commitments to corporationsStandby Letters of CreditConversion factor for Standby Letters of Credit100%20%Conversion factor for Long term credit commitments to corporations

Risk weighted Assets- Meaning To ascertain the minimum capital that must be held by banks and…

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What are the bank’s total risk-weighted assets

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

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Give typing answer with explanation and conclusion A bank has the following assets: cash and government bonds of $31.07, government agency bonds of $22.3, mortgages of 66.21, and loans to individuals and corporations of 133.46. According to Basel 1, what is the ratio of the bank's risk-weighted assets to total assets? Express in % to the nearest 0.01%; drop the % symbol. Blank 1. Calculate the answer by read surrounding text.
Consider a bank with the following balance sheet: Assets Required reserves Excess reserves Municipal bonds Residential mortgages Commercial loans $20 million $6 million $60 million $80 million $80 million Liabilities Checkable deposits Bank capital $205 million $10 million Under the original Basel Accord, calculate the bank's risk-weighted assets. The bank's total risk-weighted assets are worth $ million. (Round your response to one decimal place.)
Unibank also needs to review its off-balance-sheet risk. Using the following balance sheet value of UniBank in market value terms (in millions of dollars) Assets Cash Liquid assets Loans Total assets $ 3 30 55 88 Liabilities and equity Deposits Interbank loan Equity Total liabilities and equity In addition, the bank has contingent assets with $50 million market value and contingent liabilities with $80 million market value. Why do over-the-counter contracts carry more contingent credit risk than exchange-traded contracts? $ 35 5 48 88
Consider the balance sheet for Inspired to Thrive (IT) Bank below: Inspired to Thrive Bank Balance Sheet as at December 31, 2021 Assets SLiabilities and Owner's Equity 275 Deposits 1,105 Debts 660 Owner's Equity Reserves 1,550.00 Loans 340.00 Securities 150.00 2,040 2,040.00 What is the leverage ratio of IT bank? Why is this ratio significant to the bank's operation?
The following is the book value of the assets of a bank: Asset Book Value (in millions) U.S. Treasury securities $ 50 Municipal general obligation bonds 50 Residential mortgages 400 Commercial loans 200 Total book value $700 a. Calculate the credit risk-weighted assets using the following information: Asset Risk Weight U.S. Treasury securities 0% Municipal general obligation bonds 20 Residential mortgages 50 Commercial loans 100 b. What is the minimum core capital requirement? What is the minimum total capital requirement?
A bank has the following balance sheet: Assets Liabilities Cash 100 Deposits 600 Government bonds 100 Long term debt 185 Secured mortgages 200 Common Equity 15 Commercial loans 400 All questions are for Basel U. a) Calculate risk weighted assets. b) Does the bank satisfy capital requirements under Basel I? If the bank does not satisfy the requirement, what should it do? Give two examples and show your calculations.
A security analyst calculates the following ratios for two banks. How should the analyst evaluate the financial health of the two banks.Bank A Bank BROE 22% 24%ROA 2% 1.5%Equity Multiplier 11X 16XProfit Margin 15% 14%Asset Utilization 13% 11%Spread 3% 3%Interest Exp. Ratio 35% 40%Provision for loan loss ratio 1% 4%
Suppose that: Banks Debt Ratio Total Liabilities Total Capital Net Income Bank Alpha 1.50 $3,106,717m $279,354m $27,410m Bank Beta 1.39 $2,059,798m $200,523m $11,370m Which one is the best performing bank? a. Bank Alphab. Bank Betac. Both Banks
A bank has the following assets: cash and government bonds of $34.43, government agency bonds of $27.44, mortgages of 65.51, and loans to individuals and corporations of 143.81. According to Basel 1, what is the ratio of the bank's risk-weighted assets to total assets? Express in % to the nearest 0.01%; drop the % symbol.
The following is a simplified balance sheet of a large commercial bank. Based on this information, what is the bank's leverage ratio? Billions of GBP Assets Liabilities 62 Cash and reserves Financial assets Loans to other banks Loans to households and firms Fixed assets 13.3 12.3 11.3 4 Deposits 32 Secured borrowing 44 Unsecured borrowing 48 6 35 24
Use the Table below to answer this question (Table: Bank Balance Sheet) Based on the table, what is the leverage ratio at the bank? Bank Balance Sheet Assets Reserves $10,000 Deposits $100,000 Loans Securities 40,000 10 05 100,000 4.67 Liabilities & Net Worth Debt 20,000 Equity 30,000
Key information from the balance sheet of Transurban Bank is given below (all numbers are in millions of dollars). Cash Loans Total Assets 40 160 200 a. $0.3600 million O b. $0.2100 million O c. $0.1700 million O d. $0.1400 million e. None of the other options is correct Liabilities and equity 156 24 20 Deposits Long-term debt Equity Total 200 Due to increasing competition, the bank expects its deposits to decrease by $24 million. The average interest earned on the loans is 5 percent and the average cost of deposits is 3.5 percent. Borrowing more debt will cost the bank 4.5 percent in the short term. The bank intends to keep $30 million in cash to meet its liquidity needs and then compensate any shortfall to fund its loans by purchasing liquidity. What will be the cost of using this strategy to meet the expected decline in deposits?

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