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- Oldhat Financial starts its first day of operations with$11 million in capital. A total of $120 million incheckable deposits are received. The bank makes a$30 million commercial loan and another $40 million in mortgages with the following terms: 200 standard,30-year, fixed-rate mortgages with a nominal annualrate of 5.25%, each for $200,000.Assume that required reserves are 8%.a. What does the bank balance sheet look like?b. How well capitalized is the bank?c. Calculate the risk-weighted assets and risk-weightedcapital ratio after Oldhat’s first dayOldhat Financial starts its first day of operations with â$12 million in capital. A total of â$140 million in checkable deposits are received. The bank makes a â$25 million commercial loan and another â$60 million inâ mortgages, with the followingâ terms: 200 standard 30â-year, âfixed-rate mortgages with a nominal annual rate ofâ 5.25%, each for â$300, 000. Assume that required reserves are 8â%.(a) What does the bank balance sheet look like?(b) How well capitalized is the bank?The Tropical State Bank has $1,000 in total assets (all of which are earning assets), $700 of which will be repriced within the next 90 days. This bank also has $800 in total liabilities, $400 of which will be repriced within the next 90 days. Currently, the bank is earning 8 percent on its assets and is paying 5 percent on its liabilities. If interest rates do not change in the next 90 days, what is this bank's net interest margin? 8 percent 5 percent 4 percent 4 percent The Tropical State Bank has $1,000 in total assets (all of which are earning assets), $700 of which will be repriced within the next 90 days. This bank also has $800 in total liabilities, $400 of which will be repriced within the next 90 days. Currently, the bank is earning 8 percent on its assets and is paying 5 percent on its liabilities. If interest rates on both assets and liabilities rise by 2 percent in the next 90 days, what would be the bank's net interest margin? 4 percent 4 percent 6 percent 4 percent…
- The Tropical State Bank has $1,000 in total assets (all of which are earning assets), $700 ofwhich will be repriced within the next 90 days. This bank also has $800 in total liabilities,$400 of which will be repriced within the next 90 days. Currently, the bank is earning 8percent on its assets and is paying 5 percent on its liabilities.If interest rates on both assets and liabilities rise by 2 percent in the next 90 days, what would be thebank's net interest margin?A. 4 percentB. 4.4 percentC. 4.6 percentD. 2.4 percentNewBank started its first day of operations with$155 million in capital. A total of $92 million incheckable deposits is received. The bank makesa $28 million commercial loan and lends another$23 million in mortgage loans. If required reserves are5.4%, what does the bank balance sheet look like?Old Bank started its first day of operations (11 March, 2021) with $6 million in capital. $100 million in checkable deposits is received. The bank issues a $30 million commercial loan and another $30 million in mortgages. (a) If required reserves are 8%, what does the bank balance sheets look like?
- 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?The clean Bank has the following assets and liabilities as of year-end.All asset and liability item have face value of $1,000 and are priced at par.And interests and coupons are paid annually for all asset and liability items. Assets Amount($millions) Annual Rate Liabiltiies and Equity Amount($millions) Annual Rate 5-year loans 40 40% 3-year term deposit 20 4% 5-year coupon bonds 60 8% 5-year term deposit 30 8% Equity 50 Total 100 100 Please calulate the Clean Bank's maturity gap.What does the maturity gap imply about the interest risk of the bank?Will you view on the interest risk of the bank be different under duration model?Explain carefully..XXX, Inc. finances tis seasonal working capital need with short-term bank loans. Management plans to borrow $65,000 for a year. The bank has offered the company a 3.5 percent discounted loan with a 1.5 percent origination fee. What are the interest payment and the origination fee requiered by the loan? What is the rate of interest charged by the bank?
- ABC Corporation has a daily collection of 180,000 from a selected foreign customer group. The bank offered to accelerate the clearing time of these collections from 8 days to 5 days for a quarterly fee of 1,000. ABC can invested freed cash into a mutual fund to earn 5% annually. How much is the net benefit/cost of this bank service?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?Ames Corporation has borrowed $5 million from a bank with the understanding that it will pay the loan in monthly installments of $100,000 each. The bank charges interest at the rate of 0.8% per month. Find the time required to pay the loan.