Question
Suppose a bank has the following : Loans = 250 Securities = 150 Swaps with FED= 100 Deposits (usd) = 200 Deposits (euro) = 200
Suppose a bank has the following : Loans = 250 Securities = 150 Swaps with FED= 100 Deposits (usd) = 200 Deposits (euro) = 200
a) Does the bank satisfy the active ratio (Hint: Use AR>1 as the requirement)? If not, what can the bank do to achieve it? Give two examples. Show your calculations.
b) Why was active ratio introduced? List three things it can help achieve?
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Dynamic Business Law
Authors: Nancy Kubasek, M. Neil Browne, Daniel Herron, Lucien Dhooge, Linda Barkacs
6th Edition
1260733971, 978-1260733976
