Suppose Bank Negara Malaysia sells RM100 million of bonds to Bank A. By using a T-accounts, illustrate what happens to the reserves and the monetary base. Answer should be written with proper examples and elaborations.
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Q4 B)
(b) Suppose Bank Negara Malaysia sells RM100 million of bonds to Bank A. By using
a T-accounts, illustrate what happens to the reserves and the monetary base.
Answer should be written with proper examples and elaborations.
Thank you.
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- A6 If a bank sells ₺10 million of bonds to the Fed to pay back ₺10 million on the loan it owes, what is the effect on the level of checkable deposits?Suppose that the assets of a bank consist of $100 million of loans of BBB-rated corporations. The PD for the corporations is estimated as 1%. The average maturity is five years and the LGD is 60%. What is the total risk-weighted assets for credit risk under the Basel II advanced IRB approach? Question 5Answer a. $178.1 million b. $13.2 million c. $165.4 million d. $100 million3. What is the initial carrying amount of the loan receivable on the part of National Bank? 4. Based on preceding data, what is the initial carrying amount of the loan payable on the part of BBB Company?
- (C). A balance sheet for a hypothetical central bank is shown below: Central Bank Balance Sheet in photo Write the new balance sheet if the bank sells $100 worth of foreign bonds for domestic currency.c) If the interest rates go up by 1%, using the duration and convexity rule to determine the net worth of the bank and the equity to asset ratio d) In c)’s scenario, to maintain the equity to asset ratio at 40% which is required by the regulation, the bank decides to raise cash (zero duration and zero convexity) from the equity holders. How much cash does the bank need to raise? D) IS IN NEED ONLY. plz show the process.Choose the correct letter of answer: Company D's current assets and current liabilities are P200,000.00 and P140,000.00 respectively. How much additional funds can it borrow from banks for short term, without reducing the current ratio below 1.33? a. P13,800.00b. P86,200.00c. P52,612.00d. P35,870.00e. P41,818.00
- A Bank has the following balance sheet (in millions), with the risk weights in parentheses. In addition, the bank has $30 million in commercial direct-credit substitute standby letters of credit to a public corporation and $30 million in 10-year FX forward contracts that are in the money by $2 million. a. What are the risk-adjusted on-balance-sheet assets of the bank as defined under the Basel III? (I have this answer which should follow into question B) Cash = $19 x 0% = 0 Mortgage Loan = $65 x 50% = $32.50 Consumer Loans = $155 x 100% = $155 Therefore, the Total Risk-Adjusted On-Balance Sheet Assets is $187.50. (Unless you suggest to round to $188 for below calculations please let me know) b. What are the: Common Equity Tier I (CET1) Risk-Based Capital Ratio Tier I Risk-Based Capital Ratio The Total Risk–Based Capital Ratio? *PLEASE HELP WITH B!!! Confused with which numbers on the balance sheet to include in the Common Equity Tier 1 Capital (CET 1), Additional Tier…Suppose the Bangladesh Bank purchases a government bond from you for TK 10,000. a. Suppose you deposit the TK 10,000 in First Security Bank. Show this transaction on First Security Bank's T-account. 02 b. Suppose the reserve requirement is 20 percent. Show First Security Bank's T-account if they loan out as much as they can. 02 c. At this point, how much money has been created from the Bangladesh Bank’s policy action?QUESTION Imagine that Hazim Islamic bank, has the following asset and financial details: Balance Sheet Items RM (million) Risk weightage BNM statutory reserve 20 0% Malaysian government securities (MGS) and treasury bills 60 0% Placement with discount houses 30 10% Amounts owed by banking institutions 50 20% House financing secured by first charge on residential property 120 50% Financing and advances provided to commercial customers 400 100% Off-balance sheet items RM (million) Credit Conversion Factor Risk weightage House financing sold to Cagamas with recourse 60 100% 50% Performance sukuk for commercial customers 20 50% 100% Letters of credit for commercial customers 70 20% 100% Capital RM (million) Paid up ordinary shares 30 Share premium 5 Retained profits 10 Subordinated term debt 14 Revaluation reserve 4…
- Consider a bank with the following balance sheet (Shown in image):a) Calculate the equity (total asset – total liability) to asset ratio of the bank(Hint: equity to asset ratio = total equity/total asset) b) Calculate the duration and convexity of the both asset and liability sides; c) If the interest rates go up by 1%, using the duration and convexity rule to determine the networth of the bank and the equity to asset ratio; d) In c)’s scenario, to maintain the equity to asset ratio at 40% which is required by the regulation,the bank decides to raise cash (zero duration and zero convexity) from the equity holders.How much cash does the bank need to raise? e) Do you agree with the following statement? Explain why. “The information about a bond’s duration and convexity adjustment is sufficient to quantifyinterest rate risk exposure.”Imagine that the banking system's balance sheet can be represented by the following t-account: Assets LIABILITIES AND NET WORTH RESERVES 200 DEPOSITS 2000 BONDS 800 LOANS 1000 NETWORTH 0 TOTAL 2000 TOTAL 2000 Assuming the bank is "loaned up" the required reserve ratio is ___________ (round to two decimal places) The money multiplier is ___________ Imagine that the central bank uses open market operations to buy $300 worth of bonds from the bank above. Fill in the following t-account assuming that the money multiplier has taken its full effect: ASSETS LIABILITIES AND NET WORTH RESERVES __?___ DEPOSITS ___?__ BONDS ____?___ LOANS ____?____ NET WORTH ___?___ TOTAL _____?______ TOTAL ___?___QUESTION #1 Populate the following “T-accounts” with the following data, please make sure where double entry is required $100 million in mortgage-backed securities (MBS) $200 million demand deposits $20 million in reserves held by banks $100 million in Treasury securities held by banks $50 million in Treasury securities held by the Fed $5 million in overnight borrowing by banks from the Fed Households Banks Federal Reserve Treasury ___A_______L___ ___A_______L___ ___A_____L___ ___A_____L___