Bank's Balance Sheet Assets Liabilities and Owners' Equity $1,600 $250 Securities $1,000 Capital (owners' equity) $150 Reserves$200 Deposits Loans $800 Debt Suppose the owners of the bank borrow $100 to supplement their existing reserves.
This would increase the reserves account and the account.
This would also bring the leverage ratio from its initial value of to a new value of_
Which of the following is true of the capital requirement?
a. The higher the percentage of assets a bank holds as loans, the higher the capital requirement.
b. A minimum leverage ratio for all banks.
c. Its intended goal is to protect the interests of those who hold equity in the bank.

Question

11-08-2020
Business

contestada

Bank's Balance Sheet Assets Liabilities and Owners' Equity $1,600 $250 Securities $1,000 Capital (owners' equity) $150 Reserves$200 Deposits Loans $800 Debt Suppose the owners of the bank borrow $100 to supplement their existing reserves.
This would increase the reserves account and the account.
This would also bring the leverage ratio from its initial value of to a new value of_
Which of the following is true of the capital requirement?
a. The higher the percentage of assets a bank holds as loans, the higher the capital requirement.
b. A minimum leverage ratio for all banks.
c. Its intended goal is to protect the interests of those who hold equity in the bank.

Respuesta :

Otras preguntas

On November 10, JumpStart Co. provides $2,020 in services to clients. At the time of service, the clients paid $540 in cash and put the balance on account. a. J

Ann put $2,500 in the bank and left it for 2 years. At the end of the 2 years she found that she had $2,700. Calculate: i) the simple interest earned. ii) the a

For A do I put 4 or put 4^2 (16)?

You can use this formula to convert a temperature in Celsius (C) to Fahrenheit (F). F = 95C + 32Use the formula to covert 55°C to Fahrenheit.

Multipy 406 * 31 Show all work and steps!

What are two ways that meiosis contributes to genetic variation? How do these two ways lead to variation?

Question 4 Review This group of explorers were seeking "gold, god and glory": 1. Native Americans 2 Conquistadors 3 Norseman 4 French

How many burpees do you have to do to burn off a bag of hot Cheetos

Write a compound inequality to represent all of the numbers between -4 and 6. Write your answer using proper set notation.

A ship is flying away from Earth at 0.9c (where c is the speed of light). A missile is fired that moves toward the Earth at a speed of 0.5c relative to the ship

Parrain Parrain · Answer 1 · 2020-08-16T06:08:39+02:00

Answer:

1. This would increase the reserves account and increase the debt account.

Borrowing refers to debt and so it will increase the debt account.

2. This would also bring the leverage ratio from its initial value of 13.33 to a new value of 14.

The bank leverage ratio refers to its Assets divided by Capital (Owners equity).

Before the $100 was borrowed, the leverage ratio was;

= (Reserves + loans + securities)/Capital

= ( 200 + 800 + 1,000) / 150

= 13.33

After the $100 was borrowed

= ( 200 + 800 + 1,000 + 100) /150

= 14.

3. a. The higher the percentage of assets a bank holds as loans, the higher the capital requirement.

The capital requirement is meant to protect depositors in case the loans are defaulted on as the loans are created from the funds depositors bring in. Should the loans be defaulted on, they will be paid from the capital therefore if the bank holds more loans, it will have to hold more capital to ensure it can cover those loans.