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9. Bank leverage Use the information presented in Midwestem Mutual Bank's balance sheet to answer the following questions. Bank's Balance Sheet Assets Liabilities and Owners'
9. Bank leverage Use the information presented in Midwestem Mutual Bank's balance sheet to answer the following questions. Bank's Balance Sheet Assets Liabilities and Owners' Equity Reserves 5150 Deposits $1,200 Loans 5600 Debt $200 Securities 57'50 Capital (owners' equity] $100 Suppose a new customer adds $100 to his account at Midwestern Mutual Bank, which the owners of the bank then use to make $100 worth of new loans. This would increase the loans account and increase V the reserves V account. This would also bring the leverage ratio from its initial value of V to a new value of V . Which of the following is true of the capital requirement? Check all thafapply. Cl Its intended goal is to protect the interests of those who hold equity in the bank. CI The amount of capital required depends on the type of assets the bank holds. Cl It specifies a minimum leverage ratio for all banks. of to a new value of 15.00 eck apply. 16.00 e equity in the bank. 17.10 the bank holds. 19.40lue of to a new value of 15.00 Check all that apply. 16.00 hose who hold equity in the bank. 17.10 type of assets the bank holds. 19.40 nks
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