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Sloan [31]
3 years ago
6

Oldhat Financial starts its first day of operations with $11 million in capital.A total of $120 million in checkable deposits ar

e received. The bank makesa $30 million commercial loan and another $40 million in mortgages with thefollowing terms: 200 standard, 30- year, fixed-rate mortgages with a nominalannual rate of 5.25%, each for $200,000. Assume that required reserves are 8.
a. What does the bank balance sheet look like?
b. How well capitalized is the bank?
c. Calculate the risk weighted assets and risk weighted capital ratio after Oldhat's first day.
Business
1 answer:
Simora [160]3 years ago
7 0

Answer:

a.

Assets Side

Required Reserves   $10 million        

Excess Reserves   $51 million    

Loans   $70 million

Total $131 million

Liabilities Side

Checkable Deposits   $120 million

Bank Capital   $11 million

Total $131 million  

b. Bank capitalization can be measured with bank Leverage Ratio.

= Capital/Assets

= 11/131

= 8.40%

Bank is considered well capitalized if ratio is above 5% so Oldhat Financial is well capitalized.

c. Risk Weighted Assets = $50 million

Risk weighted capital ratio = 22%

Commercial loans are 100% risk weighted = $ 30 million

Residential mortgages are 50% risk weighted  = $ 20 millions

Total = $50 million.

Risk weighted Capital Ratio = Bank capital / Total risk weighted assets

= 11/50

= 22%

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Explanation:

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Jenna wishes to deposit $250 in the bank every month in order to save for the future. Which of these options will best suit her?
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What would happen to the buying power of your investment after one year if your rate of return was 8% and the rate of inflation
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As long as the rate of return is bigger than the inflation, the value and amount of money will increase and so will the purchasing power: the correct answer is "it will increase".

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Your boss asks you to give a presentation and you need to use a projector to show a slideshow. What are the steps to display the
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zzz [600]

Answer:

Instructions are below.

Explanation:

Giving the following information:

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Unit variable cost= $21

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