Assets Liabilities Reserves: $50 million Demand Deposits:…
Assets Liabilities Reserves: $50 million Demand Deposits: $800 million Securities: $250 million Loans: $550 million Bank Capital: Please answer the following questions about Gamecock Bank’s balance sheet that is given in the table above. If the answer to a question is a dollar amount please include the dollar sign. For any dollar value greater than $999,999 please use millions or billions, depending upon the exact answer. For example, if you think the answer is $1 million type “$1 million” (do not include quotation marks). If the answer to a question is a percentage please include the percent symbol and type your answer out to the second decimal place. For example, 42.45%. Calculate Gamecock Bank’s current dollar amount of bank capital. [bc] Calculate Gamecock Bank’s current dollar amount of assets. [a] Suppose Gamecock Bank’s current return on assets (ROA) is 1%. Use this information to calculate Gamecock Bank’s return on equity (ROE). Hint: You might need to use more than one of the provided formulas. [roe] Suppose Gamecock Bank suffered a $50 million loan default. How much equity capital would the bank have remaining after the default? [default] Would Gamecock Bank remain solvent? Answer “Yes” or “No.” (Do not include quotation marks) [solvent]
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