Question: Metrobank offers one year loans with a 9 percent stated rate
Metrobank offers one-year loans with a 9 percent stated rate, charges a ¼ percent loan origination fee, imposes a 10 percent compensating balance requirement, and must pay a 6 percent reserve requirement to the Federal Reserve. What is the return to the bank on these loans?
Answer to relevant QuestionsSuppose you are a loan officer at Carbondale Local Bank. Joan Doe listed the following information on her mortgage application:Use the information below to determine whether or not Joan Doe should be approved for a mortgage ...The following is ABC, Inc.’s, balance sheet (in thousands):Also, sales equal $ 500, cost of goods sold equals $ 360, interest payments equal $ 62, taxes equal $ 56, and net income equals $ 22. The beginning retained ...What are two ways a DI can offset the effects of asset-side liquidity risk, such as the drawing down of a loan commitment?Describe the unprecedented steps the Federal Reserve took with respect to the discount window operations during the financial crisis.Central Bank has the following balance sheet (in millions of dollars):Cash inflows over the next 30 days from the FI’s performing assets are $ 7.5 million. Calculate the LCR for Central Bank.
Post your question