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5. The following entries (in millions of dollars) are from the balance sheet of the First National Bank. U.S. Treasury bills Checkable deposits Mortgage-backed securities
5. The following entries (in millions of dollars) are from the balance sheet of the First National Bank. U.S. Treasury bills Checkable deposits Mortgage-backed securities Loans from other banks $20 70 30 Consumer loan 50 Repurchase agreements 10 10 50 20 Savings accounts Reserve deposits with Federal Reserve Residential mortgage loans Time deposits (a) Use the entries to construct a balance sheet with assets on the left side and liabilities and bank capital on the right side. (b) What is the leverage of First National Bank? (c) If First National has a 2% return on assets (ROA), what is its return on equity (ROE)? 5. The following entries (in millions of dollars) are from the balance sheet of the First National Bank. U.S. Treasury bills Checkable deposits Mortgage-backed securities Loans from other banks $20 70 30 Consumer loan 50 Repurchase agreements 10 10 50 20 Savings accounts Reserve deposits with Federal Reserve Residential mortgage loans Time deposits (a) Use the entries to construct a balance sheet with assets on the left side and liabilities and bank capital on the right side. (b) What is the leverage of First National Bank? (c) If First National has a 2% return on assets (ROA), what is its return on equity (ROE)
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