Question
Standard Acme Bancorp has the following assets. What is its Liquidity Index? Item $ in $1,000s $ in $1,000s Risk-Adjustor Cash 345,000 100% Short-term Treasuries
Standard Acme Bancorp has the following assets. What is its Liquidity Index?
Item | $ in $1,000s | $ in $1,000s | Risk-Adjustor |
Cash | 345,000 |
| 100% |
Short-term Treasuries | 12,546,800 |
| 100% |
Treasury Bonds | 609,765 |
| 100% |
Corporate Bonds | 235,680 |
| 80% |
Muni Bonds | 125,600 |
| 75% |
Loans | 345,075,000 |
|
|
Real Estate Loans |
| 275,680,000 | 90% |
Consumer Loans |
| 12,865,000 | 85% |
Comm'l/Bus Loans |
| 56,530,000 | 95% |
Real Estate | 345,000 |
| 65% |
Goodwill & Other Intangibles | 2,675,000 |
| 0% |
| $ 359,957,845 |
|
|
26. Your bank has $153 million in loan commitments which are now being drawn upon. You aren't sure, but you are beginning to think that the bank may have some problems now. What sort of risk are you concerned about, and how can you remediate it?
Step by Step Solution
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Step: 1
To calculate the Liquidity Index we need to determine the total liquid assets and divide them by the total assets Total Liquid Assets Cash 345000 Shor...
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Financial Markets And Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
7th Edition
013213683X, 978-0132136839
