Tenth National Bank has common stock of $2 million, retained earnings of $5 million, loan loss reserves of $3 million, and subordinated notes outstanding in the amount of $4 million. Total bank assets are $105 million. Calculate the equity capital ratio.
Answer to relevant QuestionsLet’s assume that you have been asked to calculate risk-based capital ratios for a bank with the following accounts: Cash = $5 million Government securities = $7 million Mortgage loans = $30 million Other loans = $50 ...Describe the functions of banks and the banking system. Why was the Dodd-Frank Wall Street Reform and Consumer Protection Act passed? Define and describe the following terms: equity capital ratio, tier 1 ratio, and total capital ratio. How are these used by bank regulators? A new bank has vault cash of $1 million and $5 million in deposits held at its Federal Reserve District Bank. a. If the required reserves ratio is 8 percent, what dollar amount of deposits can the bank have? b. If the ...
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