1. The following three one-year "discount" loans are available to you: Loan A: $120,000 at a 7% discount rate Loan B: $110,000 at a 6% discount rate Loan C: $130,000 at a 6.5% discount rate a. Determine the dollar amount of interest you would pay on each loan and indicate the amount of net proceeds each loan would provide. Which loan would provide you with the most upfront money when the loan takes place? b. Calculate the percent interest rate or effective cost of each loan. Which one has the lowest cost?

4. ATM Bank has the following liabilities and equity categories: Deposits $9 million Other liabilities $4 million Stockholders' equity ? Total liabilities and stockholders' equity ? a. What would be the bank's total liabilities and stockholders' equity if stockholders' equity were one-half the size of other liabilities? b. If total liabilities and stockholders' equity capital were $15.5 million, what would be the amount of the stockholders' equity? c. If total liabilities and stockholders' equity were $14 million, and $1 million of deposits were withdrawn from the bank, what would be the amount of the stockholders' equity?

7. Rearrange the following accounts to construct a bank balance sheet for Second National Bank. What are the total amounts that make the bank's balance sheet balance? Demand deposits: $20 million Government securities owned: $7 million Cash assets: $5 million Bank fixed assets: $14 million Loans secured by real estate: $30 million Time and savings deposits: $40 million Commercial and industrial loans: $18 million Federal funds purchased: $6 million Stockholders' equity: $6 million Other long-term liabilities: $2 million