Question: 4) Consider the following balance sheet for XYZ Community Bank B/S (millions) Assets Liabilities Reserve 10 Deposits 120 Mortgage 50 Capital 10 Real estate Commercial

4) Consider the following balance sheet for XYZ Community Bank B/S

4) Consider the following balance sheet for XYZ Community Bank B/S (millions) Assets Liabilities Reserve 10 Deposits 120 Mortgage 50 Capital 10 Real estate Commercial 130 TL 10 60 TA 130 -Mortgages: 200 30-year, fixed-rate 4% with monthly payment, each for $250.000 -Real estate loans: 10-year loans with adjustable rate -Commercial loans: 3-year loans with adjustable (prime lending) rate -Required reserves are 8% Calculate the risk-weighted assets and risk-weighted capital ratio. Suppose that 30-year mortgage rate jumped to 5%. Calculate the market value of mortgages in the balance sheet, and the capital ratio based on the market value. 4) Consider the following balance sheet for XYZ Community Bank B/S (millions) Assets Liabilities Reserve 10 Deposits 120 Mortgage 50 Capital 10 Real estate Commercial 130 TL 10 60 TA 130 -Mortgages: 200 30-year, fixed-rate 4% with monthly payment, each for $250.000 -Real estate loans: 10-year loans with adjustable rate -Commercial loans: 3-year loans with adjustable (prime lending) rate -Required reserves are 8% Calculate the risk-weighted assets and risk-weighted capital ratio. Suppose that 30-year mortgage rate jumped to 5%. Calculate the market value of mortgages in the balance sheet, and the capital ratio based on the market value

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