KOidhat Financial starts its first day of operations with $9 million in capital. A total of $140 million in checkable deposits are received. The bank makes a $30 milion commercial loan and another $50milion in mortgages, with the following terms: 200 standard 30-year, foxed-rate mortgages with a nominal annual rate of 5.25%, each for $250,000. Assume that required reserves are 8%Complete the bank's balance sheet provided below. (Round your responses to the nearest whole number)AssetsThe leverage ratio is%, and the bank isRequired reservesExcess reservesLoans$11 million$ 58 million$ 80 millionLiabilitiesCheckable depositsBank capital1(Round your response to two decimal places)$140 million$9 million

Statement of financial position (balance sheet) refers to a statement which provides a brief summary…

Answered: K Oldhat Financial starts its first day…

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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Similar questions

In the example below, we will use year-end assets. Bank A receives $70 in deposits at 5% and, together with 40 in equity, makes a loan of $90 at 7%. The remaining of assets is G-Bond. We will ignore taxes for the moment. Bank A Cash Reserves for Deposit ? Loan 7% $90 G-Bond 5% ? Deposits 5% $70 Equity $40 Total Assets $? Total Equity and Deposit $110 If Cash Reserves for deposit is at least 8% of the deposit under the Basel Accord, how much of the G-Bond Bank A should purchase? $17 $14 $16 $18 $20 $15 $19 $21
A client deposits 150,000 in a bank, with the bank agreeing to pay 6% annual effective for three years. The client indicates that one third of the account balance will be withdrawn at the end of the first year and half of the account balance will be withdrawn at the end of the second year. The bank can invest in either one year or three year zero coupon bonds. The one year bonds yield 7% and the three year bonds yield 10%. Develop an investment program based on immunization.
ABC Corporation receives checks from its customers. The total check value averages 700,000 each day. It takes an average of 5 days from deposits for these to clear the bank. If the bank offers to accelerate the 5-day clearing process to 3 days for a monthly fee of 600. If ABC can earn 4% investment income from excess cash, how much is the net annual benefits/cost of this bank offer?
A bank deposit paying simple interest at the rate of 6%/year grew to $1300 in 8 months. Find the principal. (Round your answer to the nearest cent.) $
Bank of vancouver pays 7% simple interest on its saving account balances, whereas bank of calgary pays 7% interest compounded anually. If you made a $6000 deposit in each bank, how much more money would you earn from your bank of calgary account at the end of nine years?
You wish to invest ₱10,000 for a period of 5 years. Which of the following investments would be best for you? Defend your answer in choosing the bank with the best investment by creating a report showing the comparison of each bank.Bank A: 3.75% simple interest rateBank B: 3.25% compounded annuallyBank C: 3.25% compounded quarterlyBank D: 3.25% compounded monthlyBank E: 3.15% compounded daily
Go Debt Bank Limited quotes a 9 percent interest rate on loans for 1 year. You are seeking a loan of $50,000 and as such you are expected to pay $4,500 in interest for the year. The terms of the loan requires you to repaythe principal and interest at the end of year one = $54,500. Go Debt Bank Limited thus requires you to pay $54,500 over a 12 month period, or $4,541.67, per month over the next 12 months.Is this a 9 percent loan? What rate should be legally quoted? What is the effective annual rate? Show all working.
Suppose that Big Bucks Bank has the simplified balance sheet shown below. The reserve ratlo Is 20 percent. Assets (1) (2) Liabilities and net worth (1) (2') Reserves 26,000 Checkable deposits $ 100,000 Securities 38,000 Loans 36,000 Instructions: Enter your answers as a whole number. a. What is the maximum amount of new loans that Big Bucks Bank can make? Using the table above, show In columns 1 and 1' how the bank's balance sheet wll appear after the bank has lent this additional amount by Inserting the new values Into the gray shaded cells of the glven table. b. By how much has the money supply changed? C. How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cleared agalnst the bank? Show the new balance sheet in columns 2 and 2' by Inserting the new values Into the gray shaded cells of the given table. d. Using the original figures, revisit questions a, b, and cbased on the assumption that the reserve ratio is now 15 percent.…
YY Corporation has daily collections of 130,000 from a selected foreign customer group. The bank offered to accelerate the clearing time of these collections from 8 days to 3 days for a quarterly fee of 1,000. YY can invested freed cash into a mutual fund to earns 5% annually. How much is the net benefit/(cost) of this bank service?
Please answer all questions and show all calculations. Thank you.

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