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Consider the current bank balance sheet and answer the following question.

Please tell me how to find the returan on equity and the GAP, thanks a lot!

Consider the (partially completed) current bank balance sheet for Piggy Bank below: LIABILITIES ASSETS Thousands of Dollars (Thousands of Dollars) Vault Cash 140 Demand Deposits 6,400 Deposit w/ FED 680 Time Deposits 30,000 Securities 110,800 12,580 Loans Loans 120,600 other Assets 26,000 Equity cum sum Piggy Bank is earning 4.00 percent interest on its asset portfolio and is paying 3.5 percent interest or its financial liabilities. The (McCauley) duration of its assets is 5.2 and the duration of its financial liabilities is 4.14. Twenty five (25) percent of the bank's assets and seventy five percent of its financial liabilities are interest sensitive. The required reserve ratio for Demand Deposits is 5 percent and the required reserve ratio for Time Deposits is1 percent. The capital to asset ratio, K, for Piggy Bank is a) 0.075 b) 0.080 c) 0.085 d) 0.090 e) None of the above are correct. ne serve va cash t remme af Ted Return on Equity (ROE) for Piggy Bank's shareholders equals percent. a) 6.25 b) 7.50 c) 8.60 d) 9.75 e) None of the above are correct. route sensi the assets l iabi thousand dollars. Piggy Bank's GAP equals c) 64,800 d) 40,000 e) None of the above are correct. a) 80,000 b) 70,400 If interest rates rise by 25 basis points the change in Piggy Bank's net worth will be thousand dollars. a) 528.0 b) -400.0 c) o d) 400.0 e) 528.0 Seun ties Currently, Piggy Bank is holding thousand dollars in excess reserves. a) 0 b) 2 c) 400 d) e) None of the above are correct. 800 no John Taylor arpued that low interest rates which contributed to the housing and real estate boom aro

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