Consider the balance sheet for Inspired to Thrive (IT) Bank below: Inspired to Thrive Bank Balance Sheet as at December 31, 2021 Assets Reserves Loans Securities SLiabilities and Owner's Equity 275 Deposits 1,105 Debts 660 Owner's Equity 2,040 1,550.00 340.00 150.00 2,040.00 What is the leverage ratio of IT bank? Why is this ratio significant to the bank's operation?
Q: Introduction and client background You are an audit senior in Riskam and Co and you are commencing t...
A: A risk assessment approach was conducted in the design phase of the audit, and was constantly debate...
Q: On January 1, 2020, Blossom Limited had shares outstanding as follows: 5% cumulative preferred shar...
A: Earnings per share represent the value of earnings available for each share outstanding over the per...
Q: I'm not understanding this. Can someone please help and explain? THANK YOU! An inter vivos trust w...
A: Journal Entries- Journal entries refer to the authoritative book of a business which is used to reco...
Q: The firm repurchases its own common stock. e. The firm pays its quarterly dividend. f. The firm issu...
A: Sources of cash are the items from which cash inflows are generated and uses of cash are the items w...
Q: It pertains to a risk management technique when acquiring a life insurance. * risk avoidance risk r...
A: One of the risk management technique is Risk Transfer where one party transfer the risk to another. ...
Q: sources and Uses of Cash. How would each of the following events would affect the firm's balance she...
A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve first three sub...
Q: you to review the two financial statements below and give your analysis of the company’s performance...
A: "Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and ...
Q: CONGRATULATIONS Compnay recently acquired two items of equipment: >Acquired a press at an invoice p...
A: Fixed asset: It implies to a non-current tangible asset that is used by the business for a period of...
Q: Itzy Corporation provides the following information for the month of February based on the productio...
A: Variable Costing: Product Cost under Variable costing includes direct material cost, direct labo...
Q: Raw material = Rp. 150.000 Labor cost = Rp. 60.000 Overhead variable cost = Rp 90.000 Fixed S&A cost...
A: a. Product cost under variable and full costing: Particulars Variable Costing (Rp.) Full Costing ...
Q: Stark Company's most recent balance sheet reported total assets of $1.74 million, total liabilities ...
A: GIVEN Stark Company's most recent balance sheet reported total assets of $1.74 milhion, total liab...
Q: C-V-P Analysis Greek Manufacturing Company produces and sells a line of product that are sold usuall...
A:
Q: Knowledge On March 15, Viking Office Supply agrees to accept $1,200 in cash along with a $2,800, 60-...
A: Solution A journal is a company's official book in which all business transaction are recorded in ch...
Q: shes to calculate a project's present worth with estimated costs of Php 1.69M now and Php 350,000 pe...
A: The answer has been mentioned below.
Q: Access and examine section 17 of the Income Tax Act of Jamaica, then perform the following tasks: 1....
A: 1) The word "Artificial" iscompared to conventional ostensibly the same kind, unusual features and s...
Q: Required information Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume ...
A: Cost volume profit analysis is the technique used by the management for decision-making. The methods...
Q: Mr. Dela Cruz bought a piece of property for P100,000 down payment and a 10 deferred semiannual paym...
A: Solution: Present worth of property should be computed as = Down payment + Present value of deferred...
Q: 9. The first division of Furrow Company produces part I that is used by OEN's as a key part in their...
A: We should consider only variable cost for inter division transfer for computing overall profits of c...
Q: $ 270,e00 (210, еe0) $ 60,000 $ 180,000 (100, еee) $ 80,000 $ 380,000 (100, eeе) $ 280,e00 Equipment...
A: Equipment A/c ( Gross Basis ) Particulars Amount Particulars Amount To balance b/d $270,000 ...
Q: Tempura Company produces 2,000 parts each year that are used in one of its products. The unit cost o...
A: An accounting method which determines the value of profit which is realized from a operations of bus...
Q: H. Record Transactions for Jan 20 Date Transaction 1-Jan Make Initial deposit of $100,000 to checkin...
A: Introduction A journal entry means recording of all business transactions (economic or non-economic)...
Q: Antonio Melton, the chief executive officer of Melton Corporation, has assembled his top advisers to...
A: The question is based on the concept of Financial Management. Net present value is the difference be...
Q: Goods were in transit to DEF Corpora was P75,000. The goods were shippe received on January 2, 2021....
A: An accounting adjustment which defined as a business transaction that is not being written in the ac...
Q: plz answer all three parts Required information Skip to question [The following information app...
A: Solution:- 1)calculation of return on investments as follows under:- Return on investments = Net Ope...
Q: Thanks for your response. This is the full question. I only want answers to 4,5,6 and 7. Thanks ...
A: Comment - Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the ques...
Q: Use the 2016 marginal tax rates to compute the tax owed by the following person. A single woman with...
A: Income tax payable is an obligation by the tax payer to the government on the taxable income. Income...
Q: Record adjusting journal entries for each of the following for year ended December 31. Assume no oth...
A: Increase in assets should be debited and decrease in assets should be credited. Increase in liabili...
Q: True or False? You list the accounts on a Trial Balance in Ledger Order which is Assets, Liabilities...
A: Order of accounts in Trial Balance should be in this order: Assets, Liabilities, Equity.
Q: Cost of Gross Goods Sold Sales Profit (Loss) Net Ending Beg Inventory Purchases Inventory Net Sales ...
A: Formula: Net sales = Sales - Sales returns Sales = Net sales + Sales returns
Q: Type of annuity that is made at the end of each period Perpetuity Annuity Due Ordinary Annuity O Def...
A: Annuity basically refers to the money that is insured by the organization to get each year after the...
Q: DATA: May 1 - Beg. Balance - 1,000 Units @ $20 May 8 - Purchases - 1,200 Units @ $22 May 10 - Sol...
A: Date Purchase Cost of goods sold Balance Inventory Quantity Cost per Unit (In $) Total Cost (...
Q: The debits to Work in Process—Assembly Department for April, together with data concerning productio...
A: Conversion costs are costs related with the conversion of raw materials into finished goods. It incl...
Q: A house and lot can be acquired at a down payment of P500,000 and a yearly payment of P100,000 at th...
A: Solution: Cash price of property = Down payment + Present value of annual payments discounted at 14%...
Q: 1. Using the following information, what is the amount of gross profit? Purchases $ 30,526 Selling e...
A: Formula: Gross profit = Net sales - Cost of goods sold
Q: Ningning Company makes a white liquid substance that is used to cover errors made on printed documen...
A: Solution... Standard quantity = Actual output * standard quantity per unit = 900,000 units * ...
Q: What are your thoughts on the misappropriation of funds? Government budgets prevent public official...
A: Government budget shows the expenditure and total income that government has.it can be either capita...
Q: 4. A broadcasting corporation purchased equipment worth P57, 000 and paid P1, 500 for freight and de...
A: Depreciation means cost of tangible assets allocated over its useful life. Depreciation amount is d...
Q: The X division of XYZ Company is currently operating at 60% capacity or 6,000 units. It produces a s...
A: Answer 1) Calculation of Transfer price at 80% Capacity (i.e., 8,000 units) Transfer price per unit ...
Q: he municipal permit. or the month P10,000. pying supplies consisting of bond papers, staple wires, s...
A: In the accounting equation, the asset side equals liabilities and shareholders equity The shareholde...
Q: S1 Bond investments classified and accounted for as financial asset at amortized cost are recognized...
A:
Q: stion 11 To make money, we need to make an investiment. This investment represents cash flow IN when...
A: The purchase of a financial product or other valuable object with the prospect of positive future re...
Q: During the year, Scott went from Detroit, Michigan to San Jose, California. After six days of busine...
A: Given that : Scott goes for 6 days business meeting and after that he goes for 4 days vacation to si...
Q: 341,000 Fair value of plan assets, Jan. 1 Contributions to the retirement fund during the year Benef...
A: Formula: Return on plan Assets = Beginning fair value Assets + Benefits paid to retirees - Ending fa...
Q: . What was the net income after taxes of the property/casualty division?
A: Net income after taxes $1,53,750
Q: With the population aging and patients who dread sitting in a sterile dental office, dentists are fi...
A: In order to determine the Breakeven sales, the fixed cost is required to be divided by the contribut...
Q: Niosoki Auto Parts sells new parts for foreign automobiles to auto dealers. Company policy requires ...
A: Solution A journal is a company's official book in which all business transaction are recorded in ch...
Q: A company's income statement showed the following: net income, $128,000 and depreciation expense, $3...
A: Cash flows from Operating activities : Net income $128,000 (+) Depreciation $31,200 (+) Accou...
Q: Yin-Yang Corporation is composed of three operating divisions. Overall, the Yin-Yang Corporation has...
A: It is stated that Yin-Yang Corporation evaluates its managers on the basis of return on investment. ...
Q: stion 12 The higher the interest rate, the higher my future value will be. O True O False
A: From the choice to buy or buy a new car to the decision of a firm to invest in new equipment, the ti...
Q: Ayayai Company’s net income for 2020 is $52,900. The only potentially dilutive securities outstandin...
A: GIVEN Ayayai Company’s net income for 2020 is $52,900. The only potentially dilutive securities ou...
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Consider a bank with the following balance sheet (Shown in image):a) Calculate the equity (total asset – total liability) to asset ratio of the bank(Hint: equity to asset ratio = total equity/total asset) b) Calculate the duration and convexity of the both asset and liability sides; c) If the interest rates go up by 1%, using the duration and convexity rule to determine the networth of the bank and the equity to asset ratio; d) In c)’s scenario, to maintain the equity to asset ratio at 40% which is required by the regulation,the bank decides to raise cash (zero duration and zero convexity) from the equity holders.How much cash does the bank need to raise? e) Do you agree with the following statement? Explain why. “The information about a bond’s duration and convexity adjustment is sufficient to quantifyinterest rate risk exposure.”Using the image attached: a) Calculate the equity (total asset – total liability) to asset ratio of the bank(Hint: equity to asset ratio = total equity/total asset)b) Calculate the duration and convexity of the both asset and liability sides;c) If the interest rates go up by 1%, using the duration and convexity rule to determine the networth of the bank and the equity to asset ratio; d) In c)’s scenario, to maintain the equity to asset ratio at 40% which is required by the regulation,the bank decides to raise cash (zero duration and zero convexity) from the equity holders.How much cash does the bank need to raise?e) Do you agree with the following statement? Explain why. “The information about a bond’s duration and convexity adjustment is sufficient to quantifyinterest rate risk exposure.The following is selected financial data from Block Industries: How much does Block Industries have in current liabilities? A. $19,800 B. $18,300 C. $12,300 D. $25,800
- . National Bank has the following balance sheet (in millions) and has no off-balance-sheet activities. What is the CET1 risk-based ratio? What is the Tier I risk-based capital ratio? What is the total risk–based capital ratio?The following ratios gauge a bank’s leverage EXCEPT* Bills Payable to Capital Accounts Capital Accounts to Loans Debt to Equity Deposits to Capital Accounts Net Income to Total Equitya)Calculate the equity (total asset –total liability) to asset ratio of the bank (Hint: equity to asset ratio = total equity/total asset) b)Calculate the duration and convexity of the both asset and liability sides; c)If the interest rates go up by 1%, using the duration and convexity rule to determine the net worth of the bank and the equity to asset ratio; d)In c)’s scenario, to maintain the equity to asset ratio at 40% which is required by the regulation, the bank decides to raise cash (zero duration and zero convexity) from the equity holders. How much cash does the bank need to raise? e)Do you agree with the following statement? Explain why.“The information about a bond’s duration and convexity adjustment is sufficient to quantify interest rate risk exposure.”
- a)Calculate the equity (total asset –total liability) to asset ratio of the bank (Hint: equity to asset ratio = total equity/total asset) b)Calculate the duration and convexity of the both asset and liability sides; c)If the interest rates go up by 1%, using the duration and convexity ruleto determine the net worth of the bank and the equity to asset ratio; d)In c)’s scenario, to maintain the equity to asset ratio at 40% which is required by the regulation, the bank decides to raise cash (zero duration and zero convexity) from the equity holders. How much cash does the bank need to raise? e)Do you agree with the following statement? Explain why.“The information about a bond’s duration and convexity adjustment is sufficient to quantify interest rate risk exposure.” please can you answer part d and eAnswer the following statements It is an average interest rate that banks offer in the financial market: a. effective rate b. Cetes c. CPP d. TIIE It is the payment for the use of someone else's money: a. simple interest b. interests c. amount d. interest rateThe _____ rate is the lending rate at which the largest and most creditworthy corporations borrow money from banks. annualunsecured securedprime
- Suppose XYZ Bank reports interest-sensitive assets of $670 million and interest-sensitive liabilities of $875 million. What is the bank’s dollar interest-sensitive gap? Its relative interest-sensitive gap and interest-sensitivity ratio?Unibank also needs to review its off-balance-sheet risk. Using the following balance sheet value of UniBank in market value terms (in millions of dollars) Assets Cash Liquid assets Loans Total assets $ 3 30 55 88 Liabilities and equity Deposits Interbank loan Equity Total liabilities and equity In addition, the bank has contingent assets with $50 million market value and contingent liabilities with $80 million market value. Why do over-the-counter contracts carry more contingent credit risk than exchange-traded contracts? $ 35 5 48 884. Gap and Duration Analysis Take the following balance sheet, which of the assets and labilities are rate-sensitive? Which assets and liabilities are not? a. Assets Value Liabilities Value Checkable Deposits Savings Deposits Money Market Accounts 40 Long-Term Loans Long-Term Securities 75 26 100 Reserves 54 10 Variable Rate CDs 25 Short-Term Securities Variable-rate Loans 15 30 Long-Term CDs 25 b. What is the estimated rate of change of bank profit, in terms of next year's interest rate, conditional on this year's interest rate being 2%? c. Suppose that all the long-term securities that the bank holds mature in 4 years and their interest rate will be 5% in that year. What is the approximate market-value of these long-term securities in 4 years given this year's interest rate is 2%?