Suppose that the finance company affiliate of Citigroup issues $325 million in 90 day commercial paper to interested investors and uses the proceeds to purchase loans from Citibank. What accounting entries should be made on the balance sheets of Citibank and Citigroup’s finance company affiliate?
Answer to relevant QuestionsSuppose J.P. Morgan Chase Bank of New York discovers that projected new loan demand next week should total $325 million and customers holding confirmed credit lines plan to draw down $510 million in funds to cover their cash ...What are the principal advantages to the borrower of funds under an RP agreement?What is the available funds gap?Blue Skies Bank of Florida issues a three-month (90-day) negotiable CD in the amount of $20 million to ABC Insurance Company at a negotiated annual interest rate of 2.75 percent (360 day basis). Calculate the value of this ...What risks do investment products pose for the institutions that sell them? How might these risks be minimized?
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