Question: On April 2 , 2 0 2 0 , shortly after the $ 7 . 5 million deposit outflow, Key Bank had borrowed the needed

On April 2,2020, shortly after the $7.5 million deposit outflow, Key Bank had borrowed the needed fund in the fed funds market to cover the shortfall in reserves for the remainder of the month (29 days, from 4/2 to 4/30). The required yield on a discount basis was 1.5%.
On April 30,2020, Key Bank finally received the first required payments from its mortgages, loan, and T-bills, and it also paid off its fed funds loan. Key Bank was required to establish a loan loss reserve at 0.5% of the commercial loan value and the bank was in the 35% tax bracket. The bank had not engaged in any off-balance-sheet activities.
Question: What was the value of bank's risk-weighted assets (RWA) for its first month of operation?
Group of answer choices
$160,773,451.60
$155,932,756.48
$175,402,215.43
$130,426,340.40

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!