Consider a bank with the following balance sheet, as shown on the next page. You read online
Question:
Consider a bank with the following balance sheet, as shown on the next page.
You read online that the bank’s return on assets (ROA) was 1 percent. What were the bank’s after-tax profits?
Transcribed Image Text:
Bank Balance Sheet (in millions) Assets Liabilities Reserves $200 Deposits $2,000 Loans $950 Borrowing $ 0 Securities $950 Bank capital $ 100
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (QA)
To calculate the banks aftertax profits we first need to determine the net ...View the full answer
Answered By
Sarfraz gull
have strong entrepreneurial and analytical skills which ensure quality tutoring and mentoring in your international business and management disciplines. Over last 3 years, I have expertise in the areas of Financial Planning, Business Management, Accounting, Finance, Corporate Finance, International Business, Human Resource Management, Entrepreneurship, Marketing, E-commerce, Social Media Marketing, and Supply Chain Management.
Over the years, I have been working as a business tutor and mentor for more than 3 years. Apart from tutoring online I have rich experience of working in multinational. I have worked on business management to project management.
5.00+
3+ Reviews
10+ Question Solved
Related Book For
Money Banking And Financial Markets
ISBN: 9781260226782
6th Edition
Authors: Stephen Cecchetti, Kermit Schoenholtz
Question Posted:
Students also viewed these Business questions
-
Ivan Petrov was a member of the newly formed entrepreneur class in Bulgaria; partly out of desire, mostly out of necessity. The changes occurring as the country moved from a centrally planned to a...
-
In respect of each of the situations outlined below, reach a conclusion on whether or not you would modify your audit report. Give reasons for your conclusion and describe the effect on your audit...
-
Consider a bank with the following balance sheet: The bank commits to a loan agreement for $10 million to a commercial customer. Calculate the banks capital ratio before and after the agreement....
-
When a parameter is changed, does this affect the argument that was passed into the parameter?
-
What is the percentage increase in China's per capita GDP when one switches from foreign exchange rates to purchasing power parity?
-
(a) The demand for a product is perfectly inelastic and the supply of the product is perfectly elastic. If its equilibrium price is $15, draw a graph. (b) On the same graph, show a new equilibrium...
-
What is 139 modulo 12 ?
-
Chips Home Brew Whiskey management forecasts that if the firm sells each bottle of Snake-Bite for $20, then the demand for the product will be 15,000 bottles per year, whereas sales will be 90...
-
. 2. Marvel Mountain City maintains a defined contribution pension plan for its employees. Employees contribute 5% of their salaries; the city contributes 9%. The city has fiduciary duty for the...
-
Based on the following information about Banks A and B, compute for each bank its return on assets (ROA), return on equity (ROE), and leverage ratio. a. Bank A has net profit after taxes of $1.8...
-
Identify the types and sources of bank risk and explain how to control them.
-
Two days before a skiing competition, the depths of snow, x metres, at 32 points on the course were measured and it was discovered that the numerical values of x and x 2 were equal. a. Given that the...
-
Find the slope of the line that goes through the points (-9,-4) and (12,1).
-
7. As part of a pre-match entertainment at the football grand final, Jill was parachuting towards the football ground at the constant velocity of 9.8 m s. When she was 73.5 m above the ground, Jill...
-
. Given this equation, Al(OH)3 + H2CO3 Al2(CO3)3 + HO a. How many grams of water can be produced from 85.0 grams of Al(OH)3? (58.9 g HO) b. If 72.1 g of water are produced, how many grams of...
-
In an experiment, 200g of aluminum at 100C is mixed with 50g of water at 20C with the system thermally isolated. The specific heat of aluminum it is 900 J/(kg K). The specific heat of water is 4186...
-
Your company is expected to earn $ 6 million in net income next year of which it will pay out 4 5 % in dividends. If equity represents 6 0 % of your company s capital structure, what is the...
-
Using the analytical framework illustrated in the chapter, indicate the effect of the following related transactions of a firm. a. January 1: Issued 10,000 shares of common stock for $50,000. b....
-
The production budget of Artest Company calls for 80,000 units to be produced. If it takes 30 minutes to make one unit and the direct labor rate is $16 per hour, what is the total budgeted direct...
-
Provide arguments both for and against the Federal Reserves adoption of a target growth rate for M2. What assumptions would be necessary to compute such a target rate?
-
Draw a graph of money demand and money supply with the nominal interest rate on the vertical axis and money balances on the horizontal axis. Assume the central bank is following a money growth rule...
-
Using the same graph as that described in Problem, show how the central bank could use its control over the quantity of money to target a particular interest rate in the face of changes in velocity.
-
Lynda Shaffer's article is a 'revisionist' work. Having read this work, define revisionism. Provide examples from "Southernization" to show how her work challenged your view (or the dominant view as...
-
The following table contains the number of successes and failures for three categories of a variable. Test whether the proportions are equal for each category at the a=0.01 level of significance....
-
9. x = log3 200. An intermediate step is A. log10 200 10910 3 B. log103 10910 200 C. log 10 3 200 D. 200 log 10 3 10. What is one of the three pairs of polar coordinates for the point (5, -60) with...
Study smarter with the SolutionInn App