Question
Oldhat Financial started its first day of operations with $9 million in capital. $130 million in checkable deposits are received. The bank issues a $25
-
Oldhat Financial started its first day of operations with $9 million in capital. $130 million in checkable deposits are received. The bank issues a $25 million commercial loan and another $50 million in mortgages. With the following terms:
-
Mortgages: 200 standard 30-year, fixed-rate with a nominal annual rate of 5.25% each for $250,000
-
Commercial loan: Three-year loan, simple interest paid monthly at 0.75% per month.
-
If required reserves are 8%, what does the bank balance sheet look like? Ignore any loan loss reserves.
-
How well capitalized is the bank?
-
Calculate the risk-weighted assets and risk-weighted capital ratio after Oldhats first day
Oldhat Financial started its first day of operations with $9 million in capital. $130 million in checkable deposits are received. The bank issues a $25 million commercial loan and another $50 million in mortgages. With the following terms:
Mortgages: 200 standard 30-year, fixed-rate with a nominal annual rate of 5.25% each for $250,000
Commercial loan: Three-year loan, simple interest paid monthly at 0.75% per month.
If required reserves are 8%, what does the bank balance sheet look like? Ignore any loan loss reserves.
How well capitalized is the bank?
Calculate the risk-weighted assets and risk-weighted capital ratio after Oldhats first day
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started