Question 8 Capital and asset types Tier1 capital Tier 2 capital Corporate debenture Mortgage loan Loan to government ('000) 3000 1000 9000 45,000 4000 a) Calculate risk weighted asset b) Calculating the Capital Adequacy Ratio (CAR) c) Why Capital Adequacy Ratio Matters? Risk weight 90% 75% 0
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- 1. (Credit Creation) Understanding bank balance sheet is useful since it also helps our understanding of the process called "credit creation." This process shows that the Fed (central bank)'s policy of increasing the money supply is enhanced by banks' operations. Suppose an occurrence of the Fed's open market purchase proceed as follows: 1. The Fed decided to purchase $100 millions of securities from Bank A. 2. Bank A holds 10% of its increase in liquidity as required reserves, 40% as excess reserves, and use 50% as loans to Borrower A. 3. Borrower A holds 50% of her liquidity as currency and 50% as deposits in Bank B. 4. Bank B holds 10% of its increase in liquidity as required reserves, 40% as excess reserves, and use 50% as loans to Borrower B. 5. Borrower B holds 50% of her liquidity as currency and 50% as deposits in Bank C. 4. Finally, Bank C holds all of its increase in liquidity as reserves (required re- serves plus excess reserves). Hence the deposit creation process stops…Question content area top Part 1 (Related to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment Alternatives End of Year A B C 1 $ 20,000 $ 20,000 2 20,000 3 20,000 4 20,000 5 20,000 $ 20,000 6 20,000 100,000 7 20,000 8 20,000 9 20,000 10 20,000 20,000 (Click on the icon in order to copy its contents into a spreadsheet.) Assuming an annual discount rate of 23 percent, find the present value of each investment. Question content area bottom Part 1 a. What is the present value of investment A at an annual discount rate of 23…5
- Q18M4Question content area top Part 1 (Related to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment Alternatives End of Year A B C 1 $ 14,000 $ 14,000 2 14,000 3 14,000 4 14,000 5 14,000 $ 14,000 6 14,000 70,000 7 14,000 8 14,000 9 14,000 10 14,000 14,000 (Click on the icon in order to copy its contents into a spreadsheet.) Assuming an annual discount rate of 15 percent, find the present value of each investment. Question content area bottom Part 1 a. What is the present value of investment A at an annual discount rate of 15 percent?…
- please give me answer dont give answer in image formatQuestion content area top Part 1 Assuming a 1-year, money market account investment at 2.282.28 percent (APY), a 1.391.39 percent inflation rate, a 2525 percent marginal tax bracket, and a constant $50 comma 00050,000 balance, calculate the after-tax rate of return, the real rate of return, and the total monetary return. What are the implications of this result for cash management decisions? Question content area bottom Part 1 Assuming a 1-year, money market account investment at 2.282.28% (APY), a 2525% marginal tax bracket, and a constant $ 50 comma 000$50,000 balance, the after-tax rate of return is 1.711.71%. (Round to two decimal places.) Part 2 Assuming a 1-year, money market account investment at 2.282.28% (APY), a 2525% marginal tax bracket, and a constant $ 50 comma 000$50,000 balance, the after-tax monetary return is $855855. (Round to the nearest dollar.) Part 3 Given an after-tax return of 1.711.71% and an inflation rate of…HYPERINFLATIONARY FINANCIAL STATEMENTSProblem 42. Indicate whether the item is a monetary or non-monetary item:__Cash and Cash Equivalents__Loans and receivables__FAFVPL Bonds Receivables__FAAC Bonds Receivables__Investments in Shares of Stocks__Property, Plant and Equipment__Inventory__Investment Property__Prepaid asset__Intangible asset__Deferred tax asset__Accounts payable__Income tax payable__Deferred tax liability__Interest payable__Unearned revenue__Accrued expenses__Notes payable__Loans payable
- question b only please (at the very end of the page)Question: 1. Fair Hevan Mutual fund cooperation provides investment services over 10-year period. The table below has information on some of the mutual funds they holds. Fund A C D Number of funds 9651 2752 1490 3045 Total return (%) 4.7 18.5 11.6 6.9 Based on number of funds in each category, Calculate the weighted average total return. 2. What are the other possible measures for weights, if number of mutual funds is not the best option. 3.Based on the following details on investment, calculate the expected retrun of the portfolio.Question content area top Part 1 (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment End of Year A B C 1 $ 16,000 $ 21,000 2 16,000 3 16,000 4 16,000 5 16,000 $ 16,000 6 16,000 63,000 7 16,000 8 16,000 9 16,000 10 16,000 21,000 (Click on the icon in order to copy its contents into a spreadsheet.) Assuming an annual discount rate of 19 percent, find the present value of each investment. Question content area bottom Part 1 a. What is the present value of investment A at an annual discount rate of 19 percent? $enter your response here (Round…