Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

c. Assume that West Coast Bank wants to be prepared for an increase in commercial loan demand of 1 percent and an increase in consumer

image text in transcribed

c. Assume that West Coast Bank wants to be prepared for an increase in commercial loan demand of 1 percent and an increase in consumer loan demand of 2 percent during the next 2 months. Using the data in part a, recalculate the bank's liquidity surplus or deficit under these assumptions. Assets Total (mils.) Liquid (%) Cash $ 266.25 Loans: Commercial 1,002.27 Consumer 539.68 Investments 1,317.45 Other Assets 217.15 Total $ 3,342.80 Volatile (%) Funding Sources Deposits $2,228.38 Other Liabs. 855.79 10% 75% WoW 258.63 0% Equity Total $ 3,342.80 c. Assume that West Coast Bank wants to be prepared for an increase in commercial loan demand of 1 percent and an increase in consumer loan demand of 2 percent during the next 2 months. Using the data in part a, recalculate the bank's liquidity surplus or deficit under these assumptions. Assets Total (mils.) Liquid (%) Cash $ 266.25 Loans: Commercial 1,002.27 Consumer 539.68 Investments 1,317.45 Other Assets 217.15 Total $ 3,342.80 Volatile (%) Funding Sources Deposits $2,228.38 Other Liabs. 855.79 10% 75% WoW 258.63 0% Equity Total $ 3,342.80

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Markets And Institutions

Authors: Anthony Saunders, Marcia Cornett

5th Edition

0078034663, 978-0078034664

More Books

Students also viewed these Finance questions

Question

Understand DSS components and how they integrate

Answered: 1 week ago