Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- A bank’s customer wants to exercise a $6,750,000 loan commitment. Show the balance sheet after the loan is established using purchased liquidity to fund the loan. Assets Liabilities and Equity Cash $1,550,000 Deposits $7,960,000 Loans 3,470,000 Equity 1,440,000 Securities 4,380,000 Total Assets $9,400,000 Total Liabilities and Equity $9,400,000 Please answer with excel explaination. Don't upload image.arrow_forwardSuppose 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 $200arrow_forwardConsider a bank with the following balance sheet Assets Liabilities Required reserves Excess reserves T-bills Commercial loans $ 9 million Checkable deposits $ million Bank capital $ 44 million $ 52 million $ 100 million $ 10 million The bank makes a loan commitment for $15 million to a commercial customer. Before the commitment, the bank's capital ratio equals%. (Round your response to two decimal places.)arrow_forward
- Can you help me with this question?arrow_forwardSuppose that Big Bucks Bank has the simplified balance sheet shown below. The reserve ratio is 20 percent. Assets Liabilities and net worth (2) (1) (2) Reserves $ 26,000 38,000 36,000 Checkable deposits $ 100,000 Securities Loans Instructions: Enter your answers as a whole number. a. What is the maximum amount of new loans that Big Bucks Bank can make? 2$ Using the table above, show in columns 1 and 1' how the bank's balance sheet will appear after the bank has lent this additiona amount by inserting the new values into the gray shaded cells of the given table. b. By how much has the money supply changed?arrow_forwardUse 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 assetarrow_forward
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