NewBank 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?

NewBank 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?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 2P: Vigo Vacations has $200 million in total assets, $5 million in notes payable, and $25 million in...

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Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

NewBank started its first day of operations with
$155 million in capital. A total of $92 million in
checkable deposits is received. The bank makes
a $28 million commercial loan and lends another
$23 million in mortgage loans. If required reserves are
5.4%, what does the bank balance sheet look like?

Definition Definition Minimum amount that a commercial bank must hold in liquid assets in order to fulfill central bank regulations.

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