Compute the risk-weighted assets

Assignment Help Macroeconomics
Reference no: EM131049410

Consider a commercial bank with the following assets and liabilities: cash 14 million; bank's own capital 12 million; residential mortgages 60 million; commercial loans 40 million; small- and large-denomination time deposits 60 million; consumer loans 30 million; U.S. Treasury bonds 6 million; interbank loans 2 million; and checkable deposits 80 million.

(a) Given the the required reserve ration is 12%, construct the blank's balance sheet, separately listing the required and excess reserves.

(b) Is the bank well-capitalized according to the standard leverage ratio?

(c) What is the largest single deposit outflow can the bank comfortably handle, using only primary and secondary reserves? Note that even after this outflow the bank should have sufficient required reserves. Find it to the nearest whole dollar.

(d) Compute the risk-weighted assets and find risk-weighted leverage ratio.

(e) Assuming that the duration of commercial loans is 2.5 years, what will be the effect of a 2% rise in interest rates on the bank's balance sheet?

Reference no: EM131049410

Questions Cloud

How social media is changing the world in a better way : "How social media is changing the world in a better way with examples of peoples life changing ( politics, social media etc) and also on the other hand talk about how it can be affecting our health if not used in a proper way with examples."
Create maintain a detailed annotated list of resources : In a Wiki you will prepare a brief description of a data science project, for instance as listed for Assessment Task 3, followed by a table giving resources. The table would look like:
Earning some economic rent : Two workers, X and Y, are roofers working on the same wage for the same firm. X earns more economic rent than Y. Which of the following statements is false?
Americans with disabilities act enabling technologies : The Americans with Disabilities Act prohibits discrimination on the basis of disability in regard to public accommodations and commercial facilities.
Compute the risk-weighted assets : What is the largest single deposit outflow can the bank comfortably handle, using only primary and secondary reserves? Note that even after this outflow the bank should have sufficient required reserves. Find it to the nearest whole dollar. Comput..
Planning for success project planning : Projects have many dependencies, any of which could become points of failure. Without the cooperation or input from even one vital resource, a project may fail to meet its objectives. Effective project planning helps project managers think through..
What important lupus data features in building the tree : This problem illustrates the classification approach by using decision trees and the Lupus data. What are the most important three Lupus data features in building the tree
The systems development life cycle : The systems development life cycle (SDLC) provides a structured problem-solving software development methodology. What works for information system-related problems, however, also works for many business problems, too. The SDLC provides a framewor..
Checking account card to withdraw : Assume that Jimmy Cash has $3,100 in his checking account at Folsom Bank and uses his checking account card to withdraw $310 of cash from the bank's ATM machine.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Discuss the major barriers to entry into an industry

Discuss the major barriers to entry into an industry.explain how each barrier can foster either monopoly or oligopoly.which barriers , if any do you feel give rise to monopoly that is socially justifiable?

  Draw the lnie between zero and 20 delieries

Use the line drawing tool to draw a line showing the relationship between the number of deliveries (on the horizontal axis) and your total cost (on the vertical axis). Draw the lnie between zero and 20 delieries. Label this line 'Cost'.

  Why does a high unemployment rate raise

Cheaper used textbooks raises the marginal cost (MC) of attending CSULB. c. Cheaper used textbooks lowers the marginal benefit (MB) of attending CSULB. d. Cheaper used textbooks raises the marginal benefit (MB) of attending CSULB.

  How much does julie include in income each year

Julie wins a $15 million lottery payable over 30 years. In years 1 through 4, she receives annual installments of $500,000. At the beginning of year 5, Julie sells her right to receive the remaining

  Show the argument using the as/ad model

In the late 1990s a growing number of economists argued that world policymakers were focusing too much on fighting inflation. The economists also argued that the technical level of potential output had risen. Show their argument using the AS/AD mo..

  How different is your answer from the actual price change

Calculate the duration for a $1,000, 4-year bond with a 4.5 percent annual coupon, currently selling at par. Use the bond"s duration to estimate the percentage change in the bond"s price for a decrease

  Compute the excess reserve-multiplier of money

Suppose that all other banks hold only the required amount of reserves. If Nan Bank Inc. decides to reduce its reserves to only the required amount, by how much would the economy's money supply increase?

  Discuss the welfare effects of monopolies and oligopolies

The problem related to Economics and the problem is about an economic consulting firm specializing in economic structures. Markets such as cartel, oligopoly and monopoly have been discussed in detail.

  Calculate the equilibrium level of income in the economy

Calculate the equilibrium level of income in the economy, and explain why this is the case.

  Globalization, the world system and the pacific

submit a single page with two graphs or tables on it displaying this information. Write a short paragraph or two that says what the data show.

  Explicit cost and implicit cost

Tom total revenue from cafe is 50000 per year, he bought a coffee machine costing $5000 an interest rate of 5 percent and $3000 is a loan from the bank which the rates is 10%

  What effect an increase in consumer confidence

what effect an increase in consumer confidence will have on the domestic economy. In your graphs, clearly label all curves and equilibria.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd