What does the bank balance sheet look like

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Problem: Suppose that Oldhat Financial starts its first day of operations with $9 million in capital. A total of $130 million in checkable deposits is received. The bank makes a $25 million commercial loan and another $50 million in mortgages with the following terms: 200 standard, 30-year, fixed-rate mortgages with a nominal annual rate of 5.25%, each for $250,000. Assume that required reserves are 8%.

Required:

Question 1: What does the bank balance sheet look like?

Question 2: How well capitalized is the bank?

Question 3: Calculate the risk-weighted assets and risk-weighted capital ratio after Oldhat's first day.

Reference no: EM132435646

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