Answered: What is the value of the bank capital?

Business

Accounting

What is the value of the bank capital?

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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The following data relates to a bank, Tolland Union. The bank earned $3.530B of in interest revenue and paid $2.471B in interest expense last year. During the year, write offs and reserves for bad loans was a charge of $75M. This was partially offset by fees and points earned from loans and loan origination, increasing income of $24M. During that year, the bank generated net earnings of $860M. The bank has $24.9B of interest earning assets, AND total assets of $31.5B. The shareholders’ equity is $5.9B. What is the bank’s return on assets (ROA)?
The table below is the balance sheet for the Oilers Bank, which has a target reserve ratio of 5%. Liabilities/Equity Demand Deposits Shareholders' equity Assets $4,000 62,000 17,000 9,000 Reserves $72,000 20,000 Loans Securities Fixed assets Total 92,000 Total 92,000 a. The Oilers Bank is over-reserved v by $ b. The bank makes a loan equal to the excess reserves and the borrower writes a cheque (for the full amount of the loan) to another customer of the bank, who then deposits it. The new amount of excess reserves is $ c. Instead, the cheque written by the borrower is cleared against the Oilers Bank (the cheque was written to a customer of another bank). The amount of excess reserves held by the Oilers Bank is $ 14 of 40 Next > < Prev
With the following information, fill in the bank given using the specified format. (For example: 40 days) Days of working capital is _______ Annual Sales Revenue $3,650,000 Accounts Payable 300,000 Accounts Receivable 400,000 Cash 35,000 Mortgage 95,000 Equipment 200,000 Short-term Loan 100,000 Goodwill 75,000 Inventory 500,000
We have the following information about a bank's balance sheet. Rate sensitive assets = $10,000,000 Fixed-rate assets = $20,000,000 Rate sensitive liabilities = $4,000,000 Fixed-rate liabilities = $26,000,000 Let's do a simple gap analysis. If the interest rate falls by 5 percent, O a. The bank will lose $300,000. O b. The bank will lose $500,000. O c. The bank will lose $200,000. O d. The bank will gain $300,000. O e. The bank will gain $200,000.
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.…
Bank two currently has $500 million in transaction deposits. The bank has $65 million in reserves. The and its Federal reserve requirement ratio is 12%. The bank's required reserves are excess reserves are A. $60 million; $0. B. $60 million; $5 million. C. $440 million; $5 million. D. $600 million; $60 million.
6. Marly Bank currently has $650 million in transaction deposits on its balance sheet. The current reserve requirement is 10 percent, but the Federal Reserve is decreasing this requirement to 9 percent. a. Show the balance sheet of the Federal Reserve and Marly Bank if Marly Bank converts all excess reserves to loans, but borrowers return only 60 percent of these funds to National Bank as transaction deposits. b. Show the balance sheet of the Federal Reserve and Marly Bank if Marly Bank converts 90 percent of its excess reserves to loans and borrowers return 75 percent of these funds to Marly Bank as transaction deposits.
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