Really great job. Thank you so much. I really love it. Thank you so much for all of your help.
The following table provides balance sheet information for a bank. You will use this information for Question 3) and 4).
a) Using the information provided, construct a balance sheet for FiveHundo Bank. That is, properly list the assets, liabilities, and bank capital of FiveHundo Bank in a T-Account format.
b) What is the reserve ratio for FiveHundo Bank? If the reserve requirement is 10%, does this bank satisfy that requirement? Briefly explain
c) Based on your answer to b) suppose this bank decided to buy or sell short-term securities to match the 10% requirement? Briefly explain how much short-term securities they would need to buy or sell to do that.
d) Using the original balance sheet information, if the reserve requirement was 20% and this bank decided to meet that requirement by increasing their checkable deposits (i.e. they conduct a marketing campaign to get more people to sign up and deposit into checking accounts), how much checkable deposit inflow do they need? Show a calculation.
e) Using the original balance sheet information, if the reserve requirement was 1%, how much deposit outflow from money market accounts could this bank sustain and still comply with that regulation? Show a calculation.
a) Suppose interest rates in the economy rises from 1% to 10%, what will happen to FiveHundo Bank’s profit? Show a calculation.
b) Calculate the average duration of assets and liabilities for FiveHundo Bank.
c) Suppose interest rates rise in the economy from 1% to 10%, what will happen to FiveHundo Bank’s capital relative to assets? Show a calculation.
d) Using the original balance sheet information, what is the leverage ratio for FiveHundo Bank? Briefly explain whether they comply with regulations for the leverage ratio or not.
e) Using the original balance sheet information, if FiveHundo Bank had $10 of profit, what is the banks’s ROA and ROE?
5) For each statement, state whether you believe the statement is true or false. Provide a brief explanation of your reasoning. Use the Table with information about US Treasury bonds and corporate bonds.
a) The Dodd Frank Act of 2010 includes macroprudential regulation.
b) Too big to fail policy creates a moral hazard problem for depositors.
c) The role of chartering by regulators is designed to limit moral hazard in banking.
d) Glass-Steagall Act of 1933 allows a bank holding company to own an investment bank and a commercial bank.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more