The weighted marginal cost of funds is used in pricing decisions. Explain how it should be used if the loan being priced exhibits average risk. How should the weighted marginal cost of funds be used if the loan carries above average risk?
Answer to relevant QuestionsWhat are the different types of cash assets and the basic objectives for holding each? 18. Banks must pledge collateral against four different types of liabilities. Which liabilities require collateral, what type of collateral is required, and what impact do the pledging requirements have on a bank’s asset ...Assume the following transactions occur sequentially: a. The DMV Corporation, based in New Orleans, converts a $ 3 million demand deposit held at the New York Money Center Bank to a $ 3 million Eurodollar deposit held at ...Explain the role that the Federal Reserve played in providing loans to financial institutions during the financial crisis of 2007– 2010. RBC requirements may induce bank managers to change their asset composition. Explain why. Determine how a shift from any of the following should affect a bank’s required capital. How will each shift affect the bank’s ...
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