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 eserves 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? $160,773,451.60

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 eserves 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? $160,773,451.60

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 16P

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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? O $155,932,756.48 O $160,773,451.60 O $175,402.215.43 O $130,426,340.40
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. The following accounting entries record these cash flow transactions. Accounting entries for mortgages and loan. Cash Accounting entries for T-bills. Cash Accounting entries for fed funds loan. Fed funds borrowed Interest expense $198.430.35 O $145,676.25 O $271,220.49 Debit O $259,476.45 Debit Debit $3,750,000.00 $4,536.73 Question: What was the dollar amount of interest…
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 bank's ROE for its first month of operation? Group of answer choices 1.76% 1.95% 2.21% 3.48%
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: According to the balance sheet as of April 30, 2021, was Key Bank complying with the risk weighted capital requirement set by Basel 1? Group of answer choices The bank's tier 1 capital, but not total capital, meets the minimum requirement. The bank's total capital, but not tier 1 capital, meets the minimum requirement. Neither tier 1 capital nor total capital of the…
Lowlife Company defaulted on a $250,000 loan that was due on December 31, 2018. The bank has agreed toallow Lowlife to repay the $250,000 by making a series of equal annual payments beginning on December 31,2019.Required:1. Calculate the required annual payment if the bank’s interest rate is 10% and four payments are to be made.2. Calculate the required annual payment if the bank’s interest rate is 8% and five payments are to be made.3. If the bank’s interest rate is 10%, how many annual payments of $51,351 would be required to repay the debt?4. If three payments of $104,087 are to be made, what interest rate is the bank charging Lowlife?
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 dollar amount of total mortgages on the balance sheet as of April 30, 2020? Group of answer choices $71,925,512.95 $72,000,000.00 $71,865,512.95 $71,875,523.96 $71,789,863.20
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Solid Bank loaned P5,000,000 to a borrower on January 1, 2018. The terms of the loan require principal payments of P 1,000,000 each year for 5 years plus interest at 8%. The first principal and interest payment is due on January 1, 2019. The borrower made the required payments during 2019 and 2020. However, during 2020 the borrower began to experience financial difficulties, requiring the bank to reassess the collectibility of the loan. On December 31, 2020, the bank has determined that the remaining principal payment will be collected as originally scheduled but the collection of the interest is unlikely. The bank did not accrue the interest on December 31, 2020. Present value of 1 at 8%For one period 0.926For two periods 0.857 For three periods 0.794 1. What is the interest income for 2021?2. What is the carrying amount of the loan receivable on December 31, 2021?
Dear Bartleby, I need assistance calculating interest for part b only. My calculations show that $7520.00 is to be paid in June. b. Assume that management of SeaTech Inc. desires to maintain a minimum cash balance of $10,000 at the beginning of each month and has arranged a $50,000 line of credit with a local bank at an interest rate of 10% to ensure the availability of funds. Borrowing transactions are to occur only at the end of months in which the budgeted cash balance would otherwise fall short of the $10,000 minimum balance. Repayments of principal and interest are to occur at the end of the earliest month in which sufficient funds are expected to be available for repayment. (Use 360 days year for calculations.) Following are the budgeted income statements for the second quarter of 2019 for SeaTech Inc.: April May June Sales $ 112,000 $ 136,000 $ 152,000 Cost of goods sold* 76,800 91,200 100,800 Gross profit $ 35,200 $ 44,800 $…
Solid Bank loaned P5,000,000 to a borrower on January 1, 2018. The terms of the loan require principal payments of P 1,000,000 each year for 5 years plus interest at 8%. The first principal and interest payment is due on January 1, 2019. The borrower made the required payments during 2019 and 2020. However, during 2020 the borrower began to experience financial difficulties, requiring the bank to reassess the collectibility of the loan. On December 31, 2020, the bank has determined that the remaining principal payment will be collected as originally scheduled but the collection of the interest is unlikely. The bank did not accrue the interest on December 31, 2020. Present value of 1 at 8%For one period 0.926For two periods 0.857 For three periods 0.794 1. What is the impairment loss for 2020?2. What is the interest income for 2021?3. What is the carrying amount of the loan receivable on December 31, 2021?
Solid Bank loaned P5,000,000 to a borrower on January 1, 2018. The terms of the loan require principal payments of P1,000,000 each year for 5 years plus interest at 8%. The first principal and interest payment are due on January 1, 2019. The borrower made the required payments during 2019 and to 2020. However, during 2020 the borrower began to experience financial difficulties, requiring the bank to reassess the collectability of the loan. vnGomo) au9 Vd bonsbneu 6w lodio 69y tne ert On December 31, 2020, the bank has determined that the remaining principal payment will be collected as originally scheduled but the collection of the interest is unlikely. The bank did not accrue the interest on December 31, 2020.o 82 o1 1supe b6dblori e beniste16 bns PE to est s bs261obstert Present value of 1 at 8%vs beidpiew s no belugmo j2oi bap ab obsi snl.noitibe nl For one period For two periods For three periods 0.926 avsb D21o glnevis91 2nu6 Sonitotisteri mort bovia 0.857 ini rdabo to inuoms ei…
Solid Bank loaned P5,000,000 to a borrower on January 1, 2018 The terms of the loan require principal payments of P1,000,000 each year for 5 years plus interest at 8%. The first principal and interest payment is due on January 1, 2019. The borrower made the required payments during 2019 and 2020. However, during 2020 the borrower began to experience financial difficulties, requiring the bank to reassess the collectibility of the loan. On December 31, 2020, the bank has determined that the remaining principal payment will be collected as originally scheduled but the collection of the interest is unlikely. The bank did not accrue the interest on December 31, 2020 Present value of 1 at 8% For one period For two periods For three periods 0.926 0.857 0.794 What is the carrying amount of the loan receivable on December 31, 2021> O A.2,000,000 B.1,925,640 O C.1,640,360 O D.1,783,00