What is the leverage ratio for oldhat financial

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Oldhat Financial starts it's day of operations with $20 million in capital. A total of $125 million in chequable deposits are received. Bank borrows 5 million from the overnight funds market. The bank makes a $40 million commercial loan and another $60 million in mortgages with the following terms: 200 standard 30-year fixed rate mortgages with a nominal annual rate of 5.25% each for 300,000. Assume that desired reserves are 8%.

a. Complete the Bank's balance sheet below:

Assets Liabilities

b. What is the leverage ratio for Oldhat Financial? Is it well capitalized?

c. Calculate the risk-weighted assets of Oldhat Financial after the first day.

d. Calculate the risk-weighted capital ratio after the first day.

Reference no: EM132812796

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