Oldhat Financial starts its first day of operations with $9 million in capital. A total of $130
Question:
Oldhat Financial starts its first day of operations with $9 million in capital. A total of $130 million in checkable deposits is received. The bank makes a $25 million commercial loan and another $50 million in mortgages with the following terms: 200 standard, 30-year, fixed-rate mortgages with a nominal annual rate of 5.25%, each for $250,000.
Assume that required reserves are 8%.
a. What does the bank balance sheet look like?
b. How well capitalized is the bank?
c. Calculate the risk-weighted assets and risk-weighted capital ratio after Oldhat’s first day.
Balance SheetBalance 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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a Assets Liabilities Required Reserves 104 million C...View the full answer
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Related Book For 
Economics of Money Banking and Financial Markets
ISBN: 978-0134733821
12th edition
Authors: Frederic S. Mishkin
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