Refer to the 2014 financial statements and accompanying notes of Royal Bank of Canada (RBC) that are
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(a) What percentage of RBC's total assets is held in investments (at October 31, 2014 and 2013)? Note that RBC also holds a significant loan portfolio. What is the business reason for holding loans versus securities? Comment on how the investments are classified and presented on the balance sheet.
(b) What percentage of total interest income comes from securities (2014 and 2013)? Are there any other lines on the income statement or in other comprehensive income (OCI) relating to the securities? What percentage of net income (include any relevant OCI items) relates to securities (2014 versus 2013)? Calculate an approximate return on the investments in securities. Comment on the return, while looking at the nature of the securities that are being invested in.
(c) Read the notes to the financial statements that relate to the securities. Indicate and briefly explain the valuation method(s) applied.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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a millions Oct 31 2014 Oct 31 2013 Securities 199148 182710 Total Assets 940550 859745 Percentage of total assets 212 213 Loans net 435229 408850 Because banks are primarily in the business of lending ...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-1119048534
11th Canadian edition Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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