Yes financial starts its day of operations with $20 million in capital. A total of $125 million in chequable deposits are received. Bank borrows 5 million from the overnight funds market. The bank makes a $40 million commercial loan and another $60 million in mortgages with the following terms: 200 standard 30-year fixed rate mortgages with a nominal annual rate of 5.25% each for 300,000. Assume that desired reserves are 8%.

a. Complete the Banks balance sheet below:

assets liabilites

What is the leverage ratio for Yes Financial?

Is it well capitalized?

c. Calculate the risk-weighted assets of Yes Financial after the first day.

d. Calculate the risk-weighted capital ratio after the first day.