What are off-balance-sheet items and why are they important to some financial firms?
Answer to relevant QuestionsWhat accounts make up the Report of Income (income statement of a bank)?The Sea Level Bank has Gross Loans of $800 million with an ALL account of $45 million. Two years ago the bank made a loan for $12 million to finance the Sunset Hotel. Two million dollars in principal was repaid before the ...Which of these account items or entries would normally occur on a bank’s balance sheet (Report of Condition) and which on a bank’s income and expense statement (Report of Income)?Federal funds sold...... Deposits due ...What is return on equity capital, and what aspect of performance is it supposed to measure? Can you see how this performance measure might be useful to the managers of financial firms?If a bank has a net interest margin of 2.50%, a noninterest margin of −1.85%, and a ratio of provision for loan losses, taxes, security gains, and extraordinary items of −0.47%, what is itsROA?
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