In this assignment you need to calculate the balance sheet for the Great West bank. The balance sheet is a financial statement that tells you about a bank’s health. It lists the bank’s sources of funds and how they are used. It also tells you how the bank manages credit and interest rate risk. There are two parts to this assignment: First, show what the balance sheet would look like with the following financial details: Demand deposits - $29 million Advances from the Bank of Canada - $1 million Fixed Deposits - $31 million Securities - $ 26 million Non-mortgage Loans - $35 million Reserves and Cash - $10.5 million Mortgage Loans - $25 million Borrowings - $25 million Second, show what the balance sheet would look like if the desired reserves are 8 percent. Assume that Great Wests started operations with $6 million in capital. It then receives $100 million in chequable deposits. The bank makes a $25 million commercial loan and another $25 million in mortgages. Ignore any loan loss reserves.

Answer rating: 100% (QA)

Assets Demand deposits 29 million Advances from Bank of Canada 1 million Fixed deposits 31 million Securities 26 million Nonmortgage loans 35 million ... View the full answer