Assume that the stockholders' equity of a bank is ¥6,000,000 and the total liabilities of the bank is ¥2,000,000, the total assets of the bank will equal: OA. V4,000,000. OB. V6,000,000. C. ¥8,000,000.
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- Assume that the average duration of a bank's assets is four years and the average duration of its liabilities is three years. Assume the bank has the following balance sheet. Assets Liabilities Checkable deposits $100 million Bank 50 million capital Total Assets $150 million and Capital a. If interest rates are expected to increase by 5 percentage points, say from 2% to 7%, what will be the effect on the net worth of Garden bank? Answer: New value of total assets: Total Liabs $150 million New value of bank capital:Suppose that the bank holds $15m of treasury bonds, $10m of reserves, $30m of checkable deposits, $20m of time deposits and has $6m of capital. How much loan does the bank have if we know it doesn't have any other assets or liabilities not listed here? Suppose that checkable deposits and reservers pay 0 interest The interest rate on treasuries is 3% Loans pay 7% and time deposits pay 5% How much profits does the bank make? What is the bank's return on assets?Suppose a bank has $15 million in savings deposits, $7 million in checking deposits, $27 million in total deposits, and $9 million in debts. The bank is also holding $12 million in reserves, $4 million in short term government bonds, $16 million in securities, $2 million in loans. What is the bank’s net worth? Is the bank healthy or not?
- The table below reports the breakdown of assets and liabilities for all commercial banks for January 2020, two months before the start of the COVID-19 recession, and December 2020. Assets (in billions of dollars) Liabilities (in billions of dollars) Jan-20 Dec-20 Jan-20 Dec-20 Loans $10,041.54 $10,376.47 Deposits $13,293.30 $16,061.82 Reserves $1,768.52 $3,168.94 Borrowings $1,965.90 $1,715.81 Treasury Securities $3,008.19 $3,726.10 Other Liabilities $593.42 $825.74 Other Assets $2,984.52 $3,224.45 Total Assets $17,802.77 $20,495.96 Total Liabilties $17,802.77 $20,495.96 From January to December, the net worth of banks changed by $___ billion (round your answer to two decimal places).What are the essential characteristic of both transactions namely investment made in a fixed asset and investment made by a bank when it lends money?Suppose that the bank holds $15m of treasury bonds, $10m of reserves, $30m of checkable deposits, $20 of time deposits and has $6m of capital. How much loan does the bank have if we know it doesn't have any other assets or liabilities Suppose in the same bank checkable deposits and reserves pay 0 interest. The interest rate on treasuries is 3%, loans pay 7% and time deposits pay 5%. How much profit does the bank make? What is the banks return on assets?
- Suppose that the bank holds $15m of treasury bonds, $10m of reserves, $30m of checkable deposits, $20 of time deposits and has $6m of capital. How much loan does the bank have if we know it doesn't have any other assets or liabilities Suppose in the same bank checkable deposits and reserves pay 0 interest. The interest rate on treasuries is 3%, loans pay 7% and time deposits pay 5%. How much profit does the bank make?A commercial bank has $80000 in deposits. There are $6,000 in actual resources, of which $2,000 are excess reserves. Describe the Rate of return.4. ● There are 2 investors. Each has deposited $10 in the same bank. The bank invested both deposits in a single long-term project. If the bank wants to end the project before its completion, a total of $12 can be recovered (out of the $20 invested). If the bank waits until the project is completed, it will receive a total of $30. Investors can withdraw money from their bank accounts at only 2 periods: before the project is completed and after. The extensive from representation of the game between both investors is depicted below: Withdraw Not 2 Not Withdraw Not 10 2 1 2 10 Withdraw Withdraw 15 Withdraw 6 6 2 Not Withdraw 20 10 Not Not 15
- 10. Consider the following situation in the Canadian banking system: • The Bank of Canada purchases $5 million worth of government securities from an investment dealer with a cheque drawn on the Bank of Canada. • The dealer deposits this cheque at Bank XYZ, a commercial bank. • The target reserve ratio for all commercial banks is 20%. • All commercial banks operate with no excess reserves. • There is no cash drain. The maximum creation of new deposits by the banking system, including the dealer's original deposit at Bank XYZ, is $25 million. $15 million. $22.5 million. $5 million. $20 million.XYZ Corporation is trying to decide whether it should buy money market instruments or leave its funds on deposit at a commercial bank. Which of the following is an advantage of buying money market instruments over leaving funds on deposit at a commercial bank that XYZ should be aware of? a. Money market instruments offer a higher yield than leaving funds on deposit at a commercial bank. b. Money market instruments are more liquid than funds on deposit at a commercial bank. c. Money market instruments are safer than leaving funds on deposit at a commercial bank. d. Money market instruments involve a financial middleman.Suppose that an open economy starts with $1,000 and all of this money is deposited into a First Economy Bank. The T-account for First Economy bank is shown below. Assets Liabilities Required Reserves 100 Deposits $1000 Loans $400 Treasury Bills $800 Given the information above, how much capital does the bank currently hold and what is the required reserve ratio? $300; 1% $1,300; 10% $1000; 10% $500; 40%
