Questions
Quiz:Quiz 2
Single choice
Part 1Which of the following is not an asset LOADING... on a bank's balance sheet? Part 2 A. Loans. B. Reserves. C. Government securities. D. Checkable deposits.
Options
A.A. Loans.
B.B. Reserves.
C.C. Government securities.
D.D. Checkable deposits.
View Explanation
Verified Answer
Please login to view
Step-by-Step Analysis
To tackle this question, I’ll evaluate each item in terms of whether it is reported as an asset on a bank’s balance sheet or not.
Option A: Loans. Loans are a primary asset for banks; they represent money the bank has len......Login to view full explanationLog in for full answers
We've collected over 50,000 authentic exam questions and detailed explanations from around the globe. Log in now and get instant access to the answers!
Similar Questions
Part 1Oldhat Financial starts its first day of operations with $1212 million in capital. A total of $120120 million in checkable deposits are received. The bank makes a $2525 million commercial loan and another $6060 million in mortgages, with the following terms: 200200 standard 3030-year, fixed-rate mortgages with a nominal annual rate of 5.25%, each for $300,000300,000. Assume that required reserves are 88%.Complete the bank's balance sheet provided below. (Round your responses to the nearest whole number.)[table] Assets | Liabilities Required reserves | $enter your response here | million | Checkable deposits | $enter your response here | million Excess reserves | $enter your response here | million | Bank capital | $enter your response here | million Loans | $enter your response here | million | | | [/table]
Part 1Consider a bank with the following balance sheet:[table] Assets | Liabilities Required reserves | $1010 | million | Checkable deposits | $120120 | million Excess reserves | $2222 | million | Bank capital | negative $ 18−$18 | million Loans | $7070 | million | | | [/table]Assume that required reserves are 88%. In order to avoid insolvency, regulators decide to provide the bank with $2727 million in bank capital. Assume that bad news about mortgages is featured in the local newspaper, causing a bank run. As a result, $3030 million in deposits is withdrawn.Show the effects of the capital injection and bank run on the balance sheet. (Round your responses to the nearest whole number.)[table] Assets | Liabilities Required reserves | $enter your response here | million | Checkable deposits | $enter your response here | million Excess reserves | $enter your response here | million | Bank capital | $enter your response here | million Loans | $enter your response here | million | | | [/table]
Part 1Oldhat Financial starts its first day of operations with $99 million in capital. A total of $125125 million in checkable deposits are received. The bank makes a $3030 million commercial loan and another $6060 million in mortgages, with the following terms: 200200 standard 3030-year, fixed-rate mortgages with a nominal annual rate of 5.25%, each for $300,000300,000. Assume that required reserves are 88%.Complete the bank's balance sheet provided below. (Round your responses to the nearest whole number.)[table] Assets | Liabilities Required reserves | $enter your response here | million | Checkable deposits | $enter your response here | million Excess reserves | $enter your response here | million | Bank capital | $enter your response here | million Loans | $enter your response here | million | | | [/table]
Derby Bank has the following balance sheet. [table] Assets ($ million) | Liabilities and equity ($ million) Treasury notes | 100 | Deposits | 175 Loans | 200 | Overnight purchased funds | 120 Non-earning assets | 50 | Equity | 55 Total assets | 350 | Total liabilities and equity | 350 [/table] Derby Bank’s largest customer decides to exercise a $25 million loan commitment, and the bank adopts an asset liquidity management approach by liquidating Treasury notes to fund this loan commitment. Which of the following statements is CORRECT?[Fill in the blank]
More Practical Tools for Students Powered by AI Study Helper
Making Your Study Simpler
Join us and instantly unlock extensive past papers & exclusive solutions to get a head start on your studies!