A repo is basically a collateralized loan, whereas Fed funds are uncollateralized
<h3>What is
collateralized loan?</h3>
Collateralized loan obligations are a type of securitization in which payments from many small and big business loans are pooled and distributed to different classes of owners in different tranches. A collateralized debt obligation (CLO) is a type of debt obligation.
The use of a valuable item as collateral to obtain a loan is known as collateralization. If the borrower fails to repay the debt, the lender may seize and sell the asset to make up the difference. Asset collateralization offers lenders with some protection against default risk.
Collateral is a valuable object used to secure a loan. Lenders' risk is reduced by collateral. If a borrower fails on a loan, the lender can seize and sell the collateral to recuperate its losses.
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Organization and creativity
Answer:
the reserves of the bank are short by 1,000
Explanation:
it could loan up to 5,000 dollars
but because it make a new loan of 6,000
their reserves decreases by 6,000
5,000 - 6,000 = (1,000)
the reserves of the bank are now short by 1,000
the reserve ratio is not used in this calculations as the 6,000 dollar from the loan leave the bank once the check is cleared
Answer:
A. Year 1 8.3%
Year 2 9.2%
B. Yes
Explanation:
(1) Calculation for its cash flow on total assets ratio for both years
Using this formula
Cash flow on total assets ratio =Net operating cash flow/Average total assets
Let plug in the formula
Year 1 Cash flow on total assets ratio=$102,920/$1,240,000
Year 1 Cash flow on total assets ratio=8.3%
Year 2 Cash flow on total assets ratio= 138,920/1,510,000
Year 2 Cash flow on total assets ratio= 9.2%
(2) Based on the above calculation YES it's cash flow on total assets improve in Year 2 versus Year 1
Answer:
applied overhead for February 9,000
Explanation:
expected overhead 101,988
estimated cost dirve 67,992
overheead rate:
Overhead rate = 1.5
Now, applied overhead:
driver usage x rate
6,000 labor hours x 1.5 per hour = $9,000
