(a) The following information on credit and advances are found in the book of Jack and...
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(a) The following information on credit and advances are found in the book of Jack and Jane bank: i. Letter of credit GHC40000.00 ii. iii. iv. Mortgage GHC23000.00 Personal loan GHC2400 Bankers' acceptance GHC 3400.00 You are required to classify the above credit and advances in the bank's book under the following heading and provide justification for your classification (a) Fund-based lending (b) Non-Fund-base lending 10 marks (b) The following transactions are found in the books of Faja Bank and Danga Bank. Faja Bank has advanced Credit to Mr. Dany Tee at 25% fixed interest rate Danga Bank has advanced Credit to Maafio at 20% floating interest rate. i. ii. If interest rate in the country goes up by 5%: (a) What will be the effect on the interest income of the banks? 4 marks (b) Which of these two banks will gain from the rising interest rate, and why? (c) What will be the effect on each of the customers? 2 marks 4 marks (a) The following information on credit and advances are found in the book of Jack and Jane bank: i. Letter of credit GHC40000.00 ii. iii. iv. Mortgage GHC23000.00 Personal loan GHC2400 Bankers' acceptance GHC 3400.00 You are required to classify the above credit and advances in the bank's book under the following heading and provide justification for your classification (a) Fund-based lending (b) Non-Fund-base lending 10 marks (b) The following transactions are found in the books of Faja Bank and Danga Bank. Faja Bank has advanced Credit to Mr. Dany Tee at 25% fixed interest rate Danga Bank has advanced Credit to Maafio at 20% floating interest rate. i. ii. If interest rate in the country goes up by 5%: (a) What will be the effect on the interest income of the banks? 4 marks (b) Which of these two banks will gain from the rising interest rate, and why? (c) What will be the effect on each of the customers? 2 marks 4 marks
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Answer a Classification of Credit and Advances a Fundbased lending i Letter of credit GHC 4000000 ii Mortgage GHC 2300000 iii Personal loan GHC 240000 ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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