Question
In: Accounting
The Balance Sheet of Eastern Bank Ltd with its value ($m), liquid (%) and volatile (%)...
The Balance Sheet of Eastern Bank Ltd with its value ($m), liquid (%) and volatile (%) are provided below:
|
Assets |
Value ($m) |
Liquid (%) |
|
Cash |
10 |
40 |
|
Investments |
50 |
90 |
|
Commercial Loans |
50 |
-5 |
|
Consumer Loans |
10 |
20 |
|
Other Assets |
8 |
50 |
|
Total |
128 |
|
|
Liabilities |
Value ($m) |
Volatile (%) |
|
Corporate Deposits |
20 |
70 |
|
Customer Deposits |
60 |
30 |
|
Other Liabilities |
35 |
80 |
|
Equity |
13 |
|
|
Total |
128 |
-
a) Calculate total amount of liquid assets and total amount of volatile liabilities.
-
b) Calculate Liquidity Surplus / Deficit.
-
c) How this Liquidity Surplus / Deficit should be managed from Asset and Liability sides respectively?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
The Balance Sheet of Eastern Bank Ltd with its value ($m), liquid (%) and volatile (%)...
The Balance Sheet of Eastern Bank Ltd with its value ($m),
liquid (%) and volatile (%) are provided below:
Assets
Value ($m)
Liquid (%)
Cash
10
40
Investments
50
90
Commercial Loans
50
-5
Consumer Loans
10
20
Other Assets
8
50
Total
128
Liabilities
Value ($m)
Volatile (%)
Corporate Deposits
20
70
Customer Deposits
60
30
Other Liabilities
35
80
Equity
13
Total
128
a) Calculate total amount of liquid assets and total amount of
volatile liabilities.
b) Calculate...
Consider a bank with the following balance sheet (M means million): Assets Value Duration of the...
Consider a bank with the following balance sheet (M means
million): Assets Value Duration of the Asset Convexity of the Asset
5yr bond bought at a yield of 3.4% (lending money) $550M 4.562
12.026 12yr bond bought at a yield of 4% (lending money) $800M
9.453 53.565 Liabilities Value Duration of the Liability Convexity
of the Liability 2yr bond sold at a yield of 2.4% (borrowing money)
$300M 1.941 2.384 4yr bond sold at a yield of 2.8% (borrowing
money)...
Consider a bank with the following balance sheet (M means million): Assets Value Duration of the...
Consider a bank with the following balance sheet (M means
million):
Assets
Value
Duration of the Asset
Convexity of the Asset
5yr bondbought at a yield of 3.4% (lending money)
$550M
4.562
12.026
12yr bondbought at a yield of 4% (lending money)
$800M
9.453
53.565
Liabilities
Value
Duration of the Liability
Convexity of the Liability
2yr bondsold at a yield of 2.4% (borrowing money)
$300M
1.941
2.384
4yr bondsold at a yield of 2.8% (borrowing money)
$500M
3.759
8.206
Calculate...
Consider a Maxi bank with the following balance sheet (M means million): Assets Value Duration of...
Consider a Maxi bank with the following balance sheet (M
means million):
Assets
Value
Duration of the Asset
Convexity of the Asset
5yr bond bought at a yield of 3.4% (lending
money)
$550M
4.562
12.026
12yr bond bought at a yield of 4% (lending
money)
$800M
9.453
53.565
Liabilities
Value
Duration of the Liability
Convexity of the Liability
2yr bond sold at a yield of 2.4% (borrowing
money)
$300M
1.941
2.384
4yr bond sold at a yield of 2.8% (borrowing...
Bank A Balance Sheet Assets  
Bank A Balance Sheet
Assets Liabilities
Reserves $60
million Deposits $600
million
Loans $640
million Capital $100
million
Bank B Balance Sheet
Assets Liabilities
Reserves $90
million Deposits $600
million
Loans $610
million Capital $100
million
Assume the Required Reserve Ratio is 10% as mandated by the Fed.
Both banks are free to keep required reserves in accordance with
their respective bank policies.
If both banks suffer a $10 million deposit outflow, which bank
is in a better shape now, Bank A or Bank B? Why? Explain
your answer by showing and usingboth banks’...
Consider the balance sheet for the Georgia bank as presented below. Georgia Bank Balance Sheet Assets...
Consider the balance sheet for the Georgia bank as presented
below.
Georgia Bank Balance Sheet
Assets
Liabilities
Government securities
$1,600
Checking accounts
$4,000
Required Reserves
$400
Net Worth
$1,000
Excess Reserves
$0
Loans
$3,000
Total Assets
$5,000
Total Liabilities
$5,000
Using a required reserve ratio of 10% and if the bank keeps no
excess reserves, write the changes to the balance sheet for each of
the following scenarios:
Steve withdraws $200 from his checking account.
The Fed buys $2,000 in...
Consider the balance sheet for the Wahoo bank as presented below. Wahoo Bank Balance Sheet Assets...
Consider the balance sheet for the Wahoo bank as presented
below.
Wahoo Bank Balance Sheet
Assets
Liabilities
government securities
$1,600
Liabilities:
Checking accounts
$4,000
Required Reserves
$400
Net Worth
$1,000
Excess Reserves
$0
Loans
$3,000
Total Assets
$5,000
Total Liabilities
$5,000
Using a required reserve ratio of 10% and assuming that the bank
keeps no excess reserves, write the changes to the balance sheet
for each of the following scenarios:
Bennett withdraws $500 from his checking account.
The Fed buys...
The Balance sheet for Pluto Ltd disclosed the following information: Pluto Ltd Balance Sheet (extract) 30th...
The Balance sheet for Pluto Ltd disclosed the following
information:
Pluto Ltd
Balance Sheet (extract)
30th June 2019
Non-current Assets:
Plant –At cost: $500,000
Accumulated depreciation-Plant $(150,000)
The company has adopted fair value for the valuation of
non-current assets. This has resulted in the recognition in
previous periods of an asset revaluation surplus/reserve for the
plant of $60,000. The plant has a useful life of 10 years and a
zero residual value. On 31st December 2019, it was decided to...
Balance Sheet of Star Bank Ltd. Assets $ yield Liabilities $ yield Rate sensitive 1500...
Balance Sheet of Star Bank Ltd.
Assets $
yield
Liabilities $
yield
Rate sensitive
1500
12%
1800
9%
Fixed rate
1050
15%
860
8%
Other earnings
450
6%
540
4%
Non-earnings
800
Equity=600
Total
3800
3800
Calculate the net interest income, net interest margin and the
funding GAP
If the size of the bank increases by 60% and at the same time
short term rate increases by 1%, how would this affect net interest
income, net interest margin and...
Consider the balance sheet of the following bank.  
Consider the balance sheet of the
following bank.
Chase
------------------------------------------------------------------------------
Reserves
3000
Checkable Deposits 5000
Loans
7000 Savings and Time Deposits
8000
Bond Holdings
4000
Equity
1000
Using balance sheets, show all the
balance sheet steps of Chase making a loan of $1000. Provide a
brief explanation for each step and assume that the loan check is
re-deposited in another bank (provide a balance sheet for that bank...
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