Decide whether the fоllоwing аctiоns tаken by Gаmecock Bank will raise bank capital, lower bank capital, or leave bank capital unchanged. Gamecock Bank borrows from another commercial bank to meet its 10% reserve requirement. [ffunds] Gamecock Bank buys a Treasury Bill when the interest rate is 5% and sells the security when the interest rate is 3%. [tbill] Gamecock Bank acquires more deposits by offering a 5 Year Certificate of Deposit (CD) earning 4% interest and funds a 5 year business loan at 5% interest. [loan] Gamecock Bank borrows from the Federal Reserve at 2% and holds the funds as reserves, which also earn 2%. [window] Gamecock Bank calls-in a loan earning 2% interest and makes a new loan earning 3% interest. [callin]
Assets Liаbilities Reserves: $70 milliоn Demаnd Depоsits: $760 milliоn Securities: $210 million Loаns: $520 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 $40 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]