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1
New bank started its first day of operations with $6 million in capital .A total of $100 million in checkable deposits is received .The bank makes a $25 million commercial loan and another $25 million in mortgage loans .If required reserves are 8%, what does the bank balance sheet looks like.

2
New bank decides to invest $45 million in 30 day T-Bills . The T-Bills are currently trading at $4,986.70(including commissions) for a $5,000 face value instrument .How many do they purchase ? What does the balance sheet look like?

3
Consider a failing bank ,A deposit of 350,000 is worth how much if the FDIC uses the payoff method? The purchase and assumption method? which is more costly to tax payers?

4
If the below bank makes a loan commitment for $10 million to a commercial customer .find out the banks' capital ratio before and after the agreement. find out the banks risk-weighted assets before and after the agreement.
Assets Liabilities
Required Reserves 8 million Checkable deposits $100 million
Excess Reserves 3 million Bank Capital $6 million
T Bills 45 million
Commercial Loans 50 million

 

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  • Reference No.:- M925501

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