The following entries (in millions of dollars) are from the balance sheet of Revendell National...
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Finance
- The following entries (in millions of dollars) are from the balance sheet of Revendell National Bank (RNB):
| U.S. Treasury bills Demand deposits Mortgage-backed securities Loans from other banks C&I loans Discount loans NOW accounts Savings accounts Reserve deposits with Federal Reserve Cash items in the process of collection Municipal bonds Bank building | $35 65 30 8 67 5 42 10 8 10 5 4 |
- What is RNBs capital/asset ratio? Assuming the capital requirement is 10%, does the bank meet the requirement? Show your work. (20 points)
- What is RNBs capital/risk-adjusted asset ratio given the risk factors below? Assuming the capital requirement of this ratio is 25%, does the bank meet this requirement? Show your work. (20 points)
Reserves: 0
Securities (Mortgage-backed): 0.5
Securities (Municipal bonds and Treasury bills): 0.1
C&I loans: 0.8
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