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3 years ago

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

Business

1 answer:

Nana76 [90]3 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.

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Answer:

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natta225 [31]

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3 years ago

Gabriele Enterprises has bonds on the market making annual payments, with 10 years to maturity, a par value of $1,000, and selli

Vlad1618 [11]

The coupon rate is 4.29%.

FV = 1000

PMT = ?

N = 8

I = 5.10%

PV = -948

Inputting the above details on the calculator you can find PMT

$42.92 PMT(5.1%,8,-948,1000)

Alternatively, the PMT function in excel can also be used

Coupon Rate = 42.92/1000

= 4.29%

This gives you a coupon rate of 4.29%

Learn more about PMT here: brainly.com/question/24703884

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Read 2 more answers