Suppose that Mid-Size National Bank has the balance sheet in the following table and is required by

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Suppose that Mid-Size National Bank has the balance sheet in the following table and is required by law to have 20 percent of its total assets as bank capital.
a. What is the maximum simple leverage ratio Mid- Size is permitted to have?
b. What is Mid-Size€™s actual simple leverage ratio?
c. Suppose Mid-Size decides to bring its leverage ratio down to the maximum permitted level by selling some assets and using the proceeds to pay off some of its debts and checking deposits. How much in assets would it have to sell?

Liabilities and Shareholders' Equity Assets $ 600 million 40 million Property and Buildings Checking Account Deposits $

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Macroeconomics Principles and Applications

ISBN: 978-1111822354

6th edition

Authors: Robert E. Hall, Marc Lieberman

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