Use the information given in Upper Midwest National Bank's balance sheet to answer the following questions. Bank's Balance Sheet Assets Liabilities and Owners' Equity Reserves $200 Deposits $1,600 Loans $800 Debt $250 Securities $1,000 Capital (owners' equity) $150 Suppose the owners of the bank borrow $100 to supplement their existing reserves. This would increase the reserves account and account. This would also bring the leverage ratio from its initial value of to a new value of Which of the following do bankers consider when deciding how to allocate their assets? Check all that apply. The total value of liabilities The size of the monetary base The riskiness of each asset the

Use the information given in Upper Midwest National Bank's balance sheet to answer the following questions. Bank's Balance Sheet Assets Liabilities and Owners' Equity Reserves $200 Deposits $1,600 Loans $800 Debt $250 Securities $1,000 Capital (owners' equity) $150 Suppose the owners of the bank borrow $100 to supplement their existing reserves. This would increase the reserves account and account. This would also bring the leverage ratio from its initial value of to a new value of Which of the following do bankers consider when deciding how to allocate their assets? Check all that apply. The total value of liabilities The size of the monetary base The riskiness of each asset the

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Assuming an economy have only two commercial banks in it banking system, Classic Bank and Prudent Bank. The following shows the balance sheet of the two banks as at 2019.Classic BankBalance sheet as at December, 2019GHSm GHSmAssets: Liabilities & Equity:Reserves 1,000 Deposits 3,000Securities 2,000 Equity 7,000Loans & Advances 1,000Property, Plant and Equipment 6,000 .10,000 10,000Prudent BankBalance sheet as at December, 2019GHSm GHSmAssets: Liabilities & Equity:Reserves 600 Deposits 2,500Securities 1,500 Equity 4,400Loans & Advances 800Property, Plant and Equipment 4,000 .6,900 6,900Assume a required reserve ratio of 10%.What is the amount of excess reserves in this commercial banking system?
Assuming an economy have only two commercial banks in it banking system, Classic Bank and Prudent Bank. The following shows the balance sheet of the two banks as at 2019.Classic BankBalance sheet as at December, 2019GHSm GHSmAssets: Liabilities & Equity:Reserves 1,000 Deposits 3,000Securities 2,000 Equity 7,000Loans & Advances 1,000Property, Plant and Equipment 6,000 .10,000 10,000Prudent BankBalance sheet as at December, 2019GHSm GHSmAssets: Liabilities & Equity:Reserves 600 Deposits 2,500Securities 1,500 Equity 4,400Loans & Advances 800Property, Plant and Equipment 4,000 .6,900 6,900Assume a required reserve ratio of 10%.(a) What is the amount of excess reserves in this commercial banking system?…………………………….………………………………………………………………………………………………………………………………………………….……………………………………..……………………………………………………………………………….…………………………………………………………………………………………………………………………………………………(b)What is the maximum amount that the money supply can be expanded?What would be the effect of a fall in…
The table gives information from a bank's balance sheet. Calculate the bank's loans, securities, and reserves. The bank's loans are $ million. The bank's securities are $ million. The bank's reserves are $ million. Item (millions of dollars) Checkable deposits 500 Savings deposits 600 Small time deposits 500 Loans to businesses 1,050 Government securities 500 Currency 20 Reserves at the Fed 30
Normanby Bank has the following balance sheet. Assets ($ million) Liabilities and equity ($ million) Treasury notes 85 Deposits 125 Loans 115 Interbank funds 55 Equity 20 Total assets 200 Total liabilities and equity 200 One of Normanby Bank’s wholesale customers decides to make an immediate deposit withdrawal of $15 million. To fund this withdrawal request, the bank adopts a liability liquidity management approach via the interbank funds market. Which of the following statements is CORRECT? Select one: a. After the transactions, the bank has 140m in deposits, 40m in interbank funds, and total assets remain unchanged. b. After the transactions, the bank has 110m in deposits, 40m in interbank funds, and 170m in total assets. c. After the transactions, the bank has 125m in deposits, 70m in interbank funds, and 215m in total assets. d. After the transactions, the bank has 110m in deposits,…
Complete the table below for the Third National Bank. You have to distinguish between a bank's assets and bank's liabilities. The figures in the table below are for the Third National Bank. All figures are in thousands of dollars. Assets Liabilities and Net Worth Stock Shares $ 420 $ _____ $ _____ Reserves 25 _____ _____ Property 300 ____ _____ Securities 100 ____ _____ Loans 100 ____ _____ Demand Deposits 105 ____ _____
. Study the following items related to transactions during the year to September 30,2020 for Thompson’s Tours’ Inc. All transactions are reported on the financialstatements in $XCD.I. A bank overdraft of $200,000 in a chequing account at St Kitts National Bank.II. A saving account with a balance of $400,000 at Open Campus Bank andchequing account with an overdraft of $100,000 at the same bank repayable ondemand. III. The Operation Manager was given a salary advance of $2,000 on August 24, 2020 and this amount was deducted from his October salary. IV. CAD$3,045 on hand from tips up to March 31, 2020, its pre-COVID operations when the exchange rate was CAD$1 = $2.01 XCD. On September 30, 2020, the exchange rate was CAD$1 = $1.95 XCD V. Special Edition Independence postage stamps on hand valued at $200. VI. Cash holdings of US$100,000, the exchange rate on September 30, 2020 is $2.70. VII. Petty cash on hand valued at $1,500. VIII. A cheque in the amount of $5,000 and dated October 23,…
Suppose that Bank of America sells $10 million in Treasury bills to PNC Bank. Use T-accounts to show the effect of this transaction on the balance sheet of each bank Bank of America Assets Liabilities Reserves Securities PNC Bank Liabilities Reserves Securities
Beleaguered State Bank (BSB) holds $200,000,000 in deposits and maintains a reserve ratio of 10%, which also is the reserve requirement. On paper, write the T account for BSB and use it to answer the rest of this question. Now suppose that BSB's largest depositor withdraws $10,000,000 from her account one day. On paper, show the effect of this on the T account. How many dollars of cash reserves does BSB need to raise to be allowed to open for business the next morning?
Of the following, what would be classified as an asset, liability, and equity on a bank's balance sheet? Investment Securities- $23,000 •Demand Deposits- $19,000 •Now Accounts- $89,000 •Cash and Due from Banks- $9,000 •Retail CDs- $28,000 •Long-Term Debt- $19,000 •Reverse Repos- 42,000 •Loans- $90,000 •Fixed Assets- $15,000 •Other Assets- $4,000 •Paid-In Capital- $4,000 •Retained Earnings- $12,000 •Common Stock- $12,000 •Provision for Loan Losses- $2,000
Following are the balances of Bank Sohar for the year ended as on 31st December 2019 (Amounts are in 000’ OMR) PARTICULARS OMR Term loans 7,600 Cash with Central Bank of Oman 20,000 General Reserve 12,400 Share capital 8,000 Non-Banking assets 672 Land and building 2,328 Borrowings from other banks 9,500 Rebate on bills discounted 100 Notes payable 260 Cash credit and Bank overdraft 102,000 Cash with other banks 12,000 Cash in hand 760 Vehicles 5,900 Surplus transferred from income statement 3,790 Corporate securities 50,000 Money at call and short notice 3,600 Current account 84,400 Savings deposits 85,200 Other Adjustments: i. Vehicles was depreciated @ 10% ii. Additional general reserve was created for RO 620 From the above information Prepare Balance sheet and based on that information answer the following ‘3’ multiple choice questions (Do not upload Income Statement in moodle). The…
Following are the balances of Bank Sohar for the year ended as on 31st December 2019 (Amounts are in 000’ OMR) PARTICULARS OMR Term loans 7,600 Cash with Central Bank of Oman 20,000 General Reserve 12,400 Share capital 8,000 Non-Banking assets 672 Land and building 2,328 Borrowings from other banks 9,500 Rebate on bills discounted 100 Notes payable 260 Cash credit and Bank overdraft 102,000 Cash with other banks 12,000 Cash in hand 760 Vehicles 5,900 Surplus transferred from income statement 3,790 Corporate securities 50,000 Money at call and short notice 3,600 Current account 84,400 Savings deposits 85,200 Other Adjustments: i. Vehicles was depreciated @ 10% ii. Additional general reserve was created for RO 620 From the above information Prepare Balance sheet and based on that information answer the following ‘3’ multiple choice questions (Do not upload Income Statement in moodle). Cash…
Following are the balances of Bank Sohar for the year ended as on 31st December 2019 (Amounts are in 000’ OMR) PARTICULARS OMR Term loans 7,600 Cash with Central Bank of Oman 20,000 General Reserve 12,400 Share capital 8,000 Non-Banking assets 672 Land and building 2,328 Borrowings from other banks 9,500 Rebate on bills discounted 100 Notes payable 260 Cash credit and Bank overdraft 102,000 Cash with other banks 12,000 Cash in hand 760 Vehicles 5,900 Surplus transferred from income statement 3,790 Corporate securities 50,000 Money at call and short notice 3,600 Current account 84,400 Savings deposits 85,200 Other Adjustments: i. Vehicles was depreciated @ 10% ii. Additional general reserve was created for RO 620 From the above information Prepare Balance sheet and based on that information answer the following ‘3’ multiple choice questions (Do not upload Income Statement in moodle). The…

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