Question
Clayfield Bank has the following balance sheet. Assets Amount ($million) Liabilities and Equity Amount ($million) Treasury notes 30 Term deposits 130 Credit card loans 30
Clayfield Bank has the following balance sheet. Assets Amount ($million) Liabilities and Equity Amount ($million) Treasury notes 30 Term deposits 130 Credit card loans 30 Floating-rate notes 45 Mortgage loans 140 Equity 25 Total 200 Total 200
Assets | Amount ($million) | Liabilities and Equity | Amount ($million) |
Treasury notes | 30 | Term deposits | 130 |
Credit card loans | 30 | Floating-rate notes | 45 |
Mortgage loans | 140 | Equity | 25 |
Total | 200 | Total | 200 |
(i) Calculate the financing gap and financing requirement for Clayfield Bank (show all workings). (4 marks)
(ii) The financing gap has recently increased due to growing credit demand. Detail two (2) liquidity strategies that can help Clayfield Bank fill this larger financing gap. (6 marks)
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