All categories

2 years ago

Use the information presented in Northeastern Mutual Bank's balance sheet to answer the following questions.

Business

1 answer:

Nana76 [90]2 years ago

4 0

Answer:

The explanation is given as follows.

Explanation:

Task 1:

The higher the percentage of assets a bank holds as loans, the higher the capital requirement.

When the owners of the bank borrow $100 to supplement their existing reserves , both reserves and debt increase by $100 , therefore increase in debt as in any balance sheet , the total value of accounts on the left hand should be equal to the right hand , so when there is increase in reserves , there will be increase in debt.

Task 2:

It specifies a minimum leverage ratio for all banks

leverage ratio initially = total assets / capital = 1750 / 125 = 14

leverage ratio new value = total assets / capital = 1850 / 125 = 14.8 ( the assets increase by $100 with increase in reserves)

Task 3

Its intended goal is to protect the interests of those who hold equity in the bank.

Capital requirement are there to ensure that bank have enough capital to repay the depositors and debtors and if a bank holds a higher percent of risky assets , capital requirements will be higher so that the bank remains solvent hence option a is right answer.

You might be interested in

The difference between the price at which a dealer is willing to buy and the price at which a dealer is willing to sell, is call

Mademuasel [1]

Answer:

Bid-ask spread.

Explanation:

The difference between the price at which a dealer is willing to buy and the price at which a dealer is willing to sell, is called the bid-ask spread.

Simply stated, the bid-ask spread refers to the amount by which the bid price by a dealer is lower than the ask-price for a security or an asset in the market at a specific period of time.

The bid-ask spread exists because of the need for dealers to cover expenses and make a profit. A bid-ask spread is use in the transaction of the following items; options, future contracts, stocks, and currency pairs.

Generally, a dealer who is willing to sell an asset or securities would receive a bid price while the price at which the dealer is willing to sell his asset to another dealer (buyer) is the ask price.

Hence, the bid-ask spread is simply the difference between the ask price and the bid price. Therefore, a bid-ask spread is a measure of the demand and supply for an asset; where demand represents the bid while supply represents the ask for an asset.

7 0

2 years ago

High SchoolBusiness 5 points

lidiya [134]

Answer: The aspect of the SMART goal that is missing is Deadlines or Target date.

Explanation:

Here SMART is abbreviated as Specific, Measurable, Attainable, Result oriented and Time bound. The aspect of the time bound has not been included in this respective scenario.

7 0

2 years ago

Schwartz Industry is an industrial company with 100 million shares outstanding and a market capitalization (equity value) of $4

Fudgin [204]

I have to think again about this answer. I will get back! 2.22

6 0

2 years ago

In the context of international trade, India, China, and the Philippines attract multibillion-dollar investments because: a. the

noname [10]

Answer:

d. they have a large cohort of technically skilled university graduates who work for about one-fifth the pay of comparable American workers.

Explanation:

In the context of international trade, India, China, and the Philippines attract multibillion-dollar investments because: they have a large cohort of technically skilled university graduates who work for about one-fifth the pay of comparable American workers.

One of the major attractions of international trade is the exploitation of intellectual property and skills.

In China for example, research has shown that one major reasons why international trade grew was as a result of the number of Chinese workers, and the fact that they produced a sharp, sustained increase in productivity (that is, increased worker efficiency). Not to mention that the cost of labor was far cheaper than in America or Europe.

5 0

2 years ago

Name three types of insurance.

Blababa [14]

Property, liability, and life.

3 0

2 years ago