A Bank has a capital of 1 million Dollars, Deposits of 5 million Dollars and a...

 

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A Bank has a capital of 1 million Dollars, Deposits of 5 million Dollars and a debt of 2 million dollars on the liability and owners' equity side. On the Assets side, the bank has reserves of 2 million dollars, loans of 3 million dollars and securities of 3 million dollars. Estimate the bank's leverage ratio = The leverage ratio means that for of assets. every dollar of capital that the bank owner has contributed, the bank has _$ of the_S_assets, $_ are financed with borrowed money either by taking in deposits or issuing debt. A Bank has a capital of 1 million Dollars, Deposits of 5 million Dollars and a debt of 2 million dollars on the liability and owners' equity side. On the Assets side, the bank has reserves of 2 million dollars, loans of 3 million dollars and securities of 3 million dollars. Estimate the bank's leverage ratio = The leverage ratio means that for of assets. every dollar of capital that the bank owner has contributed, the bank has _$ of the_S_assets, $_ are financed with borrowed money either by taking in deposits or issuing debt.

Answer rating: 100% (QA)

To calculate the banks leverage ratio well use the formula Leverage Ratio Total Assets Capital Where ... View the full answer