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Consider a bank that has the following assets and liabilities: Loans of $100 million with a realized rate of 5% Security holdings of $50 million

  1. Consider a bank that has the following assets and liabilities:
  • Loans of $100 million with a realized rate of 5%
  • Security holdings of $50 million earning 10% interest income
  • Reserves of $10 million
  • Savings accounts of $100 million interest of 2.5%
  • Checking deposits of $30 million which pay no interest
  1. Determine Return On Assets for this bank.

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