A bank developed a model for predicting the average checking and savings account balance as balance = -18,339 +348 x age + 1,230 x years education + 0.114 x household wealth. a. Explain how to interpret the numbers in this model. b. Suppose that a customer is 26 years old, is a college graduate (so that years education = 16), and has a household wealth of $190,000. What is the predicted bank balance? a. The number -18,339 The number 348 The number 1,230 The number 0.114

A bank developed a model for predicting the average checking and savings account balance as balance = -18,339 +348 x age + 1,230 x years education + 0.114 x household wealth. a. Explain how to interpret the numbers in this model. b. Suppose that a customer is 26 years old, is a college graduate (so that years education = 16), and has a household wealth of $190,000. What is the predicted bank balance? a. The number -18,339 The number 348 The number 1,230 The number 0.114

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Suppose you deposit $100 in a bank, which of the following will occur A The bank's assets will increase by $100 B The bank's liabilities will increase by $200 C The bank's liabilities will decrease by $100 D The bank's reserves will increase by $200
Interest on your bank balance: Suppose your bank account has a balance todayof $100. Consider the following time periods: t = 0, t = 1, t = 2, t = 12,t = 24, t = 48, and t = 60. Assume there are no deposits or withdrawalsin this account other than the interest that accumulates. (If you like, use aspreadsheet program to help you with this question.)(a) Compute your bank balance for these time periods assuming the interestrate is 1%.(b) Do the same thing for an interest rate of 6%.(c) Plot your bank balances for these two scenarios on a standard scale.(d) Do the same thing with a ratio scale.
can you please do this question that is about the bank balance sheet to do assets and liabilities and income statement? please if you can do it per 1 hour?
A bank has a net income after taxes of $4 million, assets of $200 million, and bank capital of $10 million. What is the bank's return on assets (ROA)? Write your answer as a percent rate.
Based on the information provided below about banks A and B, compute for each bank its return on assets (ROA), return on equity (ROE) and Equity Multiplier. Show your work. a. Bank A has net profit after taxes of $2.38 million and the balance sheet below: Bank A (in millions) Assets Liabilities Reserves $10 Deposits $100 Loans $80 Borrowing $15 Securities $50 Bank Capital $25 b. Bank B has net profit after taxes of $1 million and the balance sheet below: Bank B (in millions) Assets Liabilities Reserves $8 Deposits $75.0 Loans $60 Borrowing $5.0 Securities $22 Bank Capital $10.0
A bank has deposits of $400. It holds reserves of $50. It has purchased government bonds worth $70. It has made loans of $500. Set up a T-account balance sheet for the bank, with assets and liabilities, and calculate the banks net worth.
A bank has the following balance sheet. It expects a net deposit drain of $500,000. Assets Liabilities and Equity Cash $300,000 Deposits $3,115,000 Loans 2,000,000 Equity 385,000 Securities 1,200,000 Total Asset $3,500,000 Total Liabilities and Equity $3,500,000 What is a net deposit drain and why is it of concern for the bank? Show the bank’s balance sheet if it uses stored liquidity to offset the expected drain.
Assume the Bank of Smallville opens its doors to depositors and receives $100,000 in cash deposits. a) Prepare a balance sheet for Bank of Smallville based on the above information. b) Assume furthermore that the bank has to abide by a 20% reserve ratio. How much in excess reserves does the bank hold? Could this bank make a loan in the amount of $90,000? Briefly explain. c) Based on the amount of excess reserves, if the bank makes the loans, show the immediate impact on the Bank of Smallville's balance sheet. d) Calculate value of the money multiplier? e) How much money would be created in the banking system if other banks also lend as much as possible? Part B a) What is meant by the term "excess supply of money?" How does the money market resolve this disequilibrium? b) Explain with diagrams, what happens to the money supply, interest rates, investment spending and GDP when the central bank makes open market purchases.
You have a checking account and a savings account at a credit union. Your checking account has a constant balance of $500. The table shows the total balance of the accounts over time. Total Year, t balance $2500 1 $2540 2 $2580.80 $2622.42 4 $2664.86 $2708.16 a. Write a function m that represents the balance of your savings account after t years. m(t) b. Write a function B that represents the total balance of the two accounts after t years. B(t) =
Consider the balance sheet for Inspired to Thrive (IT) Bank below: Inspired to Thrive Bank Balance Sheet as at December 31, 2021 Assets SLiabilities and Owner's Equity 275 Deposits 1,105 Debts 660 Owner's Equity Reserves 1,550.00 Loans 340.00 Securities 150.00 2,040 2,040.00 What is the leverage ratio of IT bank? Why is this ratio significant to the bank's operation?
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Use the information presented in Northeastern Mutual Bank's balance sheet to answer the following questions. Bank's Balance Sheet Assets Liabilities and Owners' Equity Reserves $100 Deposits $1,000 Loans $500 Debt $50 Securities $400 Capital (owners' equity) -$50 Suppose the owners of the bank contribute an additional $125 from their own funds and use it to buy securities in the name of the bank. This would increase the securities account and the account. This would also bring the leverage ratio from its initial value of to a new value of Which of the following do bankers take into account when determining how to allocate their assets? Check all that apply. The total value of liabilities The size of the monetary base The return on each asset

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