Using the table above and suppose a recession causes our bank's assets to fall by 5%, dețermine the leverage ratio. O S137.750
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- First National Bank Assets Liabilities Rate-sensitive $80 million $50 million Fixed-rate $20 million $50 million According to the above balance sheet, if interest rates rise by 5 percentage points, say, from 10 to 15%, bank profits (measured using gap analysis) will increase by $ million (put a negative sign if it is a decrease). Question 34 options:QUESTION 5 A bank with $10,000 in assets has ROA =2% and ROE =10%. What is its leverage ratio (TA/Equity)? 2.5 5 4 1.25 QUESTION 6 The expected loss of a loan is a function of the following, except Unexpected loss Loss given default Exposure at default Probability of defaultReserves Treasury Securities Real Estate Loans Commercial Loans O 7.69%, No O 8.14%, Yes Assets O 7.27%, No O 6.45%, Yes Table 10 $15 $10 $64 $66 Use Table 10 to calculate the risk weighted capital ratio of First National Bank. Is it well capitalized? Use weights of zero for risk free assets and 0.95 for risky assets. Deposits Capital Liabilities $145 ?
- Rate-sensitive Fixed-rate Assets $20 million $80 million Liabilities $50 million $50 million 9) If interest rates rise by 5 percentage points, say, from 10 to 15%, bank profits (measured using gap analysis) will (Show your calculation) A) decline by $0.5 million. B) decline by $1.5 million. C) decline by $2.5 million. D) increase by $1.5 million.First National Bank Assets Liabilities Rate-sensitive $80 million $50 million Fixed-rate $20 million $50 million according to the above balance sheet, if interest rates rise by 5 percentage points, say, from 10 to 15%, bank profits (measured using gap analysis) will increase by $___ million (put a negative sign if it is a decrease)Consider the following balance sheet Expected Balance Sheet for XYZ Bank Assets Yield Liabilities Cost Rate sensitive $ 800 7.0% 500 3.0% Fixed rate $ 400 9.0% 300 5.0% Non earning $ 200 200 $ 1,000 Equity 400 Total $ 1,400 $ 1,400 What is the Net Interest Margin (NIM) Select one: O a. 4.5% O b. 6.2% O c. 5.17% O d. 7.12% %24 %24 %24
- 21' Assets Reserves Securities Loans Your bank has the following balance sheet: $ 50 million. 50 million 150 million Liabilities Checkable deposits $200 million Bank capital If the required reserve ratio is 20%, what impact would an unexpected deposit outflow of $50 million have on the bank's balance sheet? That is, what would the new balance sheet look like? Does the bank have a liquidity issue? Explain. Describetwo actions that you might recommend the bank manager take if there is an unexpected deposit outflow of $50 million? What option would you least prefer to use of all the possible actions a bank might take? 50 million.QUESTION 20 First National Bank Assets Liabilities and Owners' Equity Reserves $1,800 Deposits $16,000 Loans $9,000 Debt $1000 Short-term securities $7,000 Capital (owners' equity) $800 If the market value of Short-term securities fall to $6,800. Then the percentage change of the leverage ratio is: a. 31.83% b. 29.33% C. -29.33% d. -31.83% e. 200$ f.-200$ g. There is not enough information to find the answer a e f OOO OTable 29-5 Reserves Loans Short-term securities 25. 50. Assets 13.3. Refer to Table 29-5. This bank's leverage ratio is 7.5. First National Bank Liabilities and Owners' Equity $1,200 Deposits 3,000 Debt 800 Capital (owners' equity) $4,000 800 200 K
- QUESTION 7 Given the following information, what is expected loss of a $200,000 loan in percent? Probability of default 0.30% Loss given default 55.00% .15% .22% .33% .17% QUESTION 8 A bank reviewed over 800 automobile loans belonging to risk category 3 borrowers. If the bank uses a confidence level of 99.25%, what is the economic capital or loan at risk of a $200,000 loan? The historical losses in ascending order is as follows: Loan 1 0 2 0…Table 2 First National Bank Assets Liabilities and Owners' Equity Reserves $1,200 Deposits $9,000 Loans S৪,000 Debt $800 $800 Capital (owners' equity) $200 Short-term securities Refer to Table 2. The required reserve ratio is 6 percent and First National Bank sells $150 of its short-term securities to the Federal Reserve. This action will increase First National's reserves by $150. Its excess reserves are $240. decrease First National's reserves by $150. Its excess reserves are $0. increase First National's reserves by $150. Its excess reserves increase by $150. increase First National's reserves by S150. Its total reserves increase by $150. both c and d aboveQ25 Examine the chart below which contains Bank 1’s balance sheet. If the legal reserve requirement is 40%, then excess reserves are?: Assets Liabilities Total Reserves ? Demand Deposits $600,000 Loans $300,000 Question 25 options: a) $360,000 b) $60,000 c) $240,000 d) $120,000