FIN260review notes for 08FB.docx
- 文档编号:24511644
- 上传时间:2023-05-28
- 格式:DOCX
- 页数:24
- 大小:318.32KB
FIN260review notes for 08FB.docx
《FIN260review notes for 08FB.docx》由会员分享,可在线阅读,更多相关《FIN260review notes for 08FB.docx(24页珍藏版)》请在冰豆网上搜索。
FIN260reviewnotesfor08FB
FIN2600REVIEWNOTES
May12,2012
SimonWang
Assignment1
Chapter3Problem2,5
3-2.
Bankscanperformmostoftheactivitieslisted.Itmaybeeasiertotalkabouttheactivitiestheycannotdo.Theycannotsellofficefurniture.Theycannotperformprofessionaladvertisingservices.Theycannotformrealestatedevelopmentcompanies,althoughthereissomediscussioninthemediaofallowingthisinthefuture.Theycandojustabouteverythingelsetoday.
3-5.
ChinaisahugemarketandenteringintotheChinesemarketnowmaygivethisbankanadvantageoverotherbanksthatwaitenter.TheywillalreadyhavethenecessarycontactsandunderstandingoftheChinesesystemwhenitbecomesamoreopeneconomyinthefuture.However,thereisconsiderablerisk.Itcouldbeyearsbeforetheeconomybecomesmoreopensoprofitopportunitiesmightbeslowtodevelop.Inaddition,thegovernmentcouldchangeitsmindaboutallowingforeignbanksownershipinChinaandseizeanyassetsheldbyforeignbanks.Finally,thesystemisdominatedbylargegovernmentownedbanksanditmaybedifficulttocompetewiththesebanks.TheChinesegovernmentcouldgivepreferentialtreatmenttothesegovernmentbanksattheexpenseoftheprivatesector.
Assignment2
Chapter4Problem3,4
4-3.
Theestimatedtotalrateofreturnwouldbe:
E(R)=0.10(13%)+0.90(10%)=10.3%
Theriskattachedtothisoverallreturnratewouldbe:
Thus2.89%andthebranchwillslightlyincreasethebank'sexpectedreturnbutslightlydecreaseitsoverallrisk.Thebankshouldproceedwiththisproject.
4-4
Thebank'stotalexpectedreturnis:
E(R)=0.15(16%)+0.85(10%)=10.9%
Thebank'sriskexposureis:
Andthus
Theproposedprojectraisesthesavingsbanksexpectedreturnslightlyanddoesnotaffecttheriskofthebank.Thisisagoodproject.
Assignment3
Chapter5Problem1,2,3
5-1.
ReportofCondition
CashandduefromDepositoryInstitutions
87
Securities
?
70
*Thisistheonlyassetmissingandsoistotalassets
FederalFundsSoldandReverseRepurch.
24
lessalloftherestoftheassetslistedhere
GrossLoansandLeases
1131
LoanLossAllowance
?
0
*NetLoansisGrossLoansLessLoanLoss
NetLoansandLeases
1131
AllowanceorLoanLossAllowanceisthedifference
TradingAccountAssets
2
betweenGrossandNetLoans
BankPremisesandFixedAssets
12
OtherRealEstateOwned
2
GoodwillandOtherIntangibles
5
AllOtherAssets
67
TotalAssets
1400
TotalDeposits
904
FederalFundsPurchasedandRepurchaseAgree.
81
TradingLiabilities
0
OtherBorrowedFunds
25
SubordinatedDebt
?
210
*SubordinatedDebt=TotalLiabiltiesLessAllofthe
AllOtherLiabilities
42
OtherLiabilities
TotalLiabilities
?
1262
*TotalLiabilities=TotalAssetsLessTotal
EquityCapital
PerpetualPreferredStock
0
CommonStock
3
Surplus
?
73
*Surplus=TotalEquityCapitalLesstheRestof
UndividedProfit
62
theEquityAccounts
TotalEquityCapital
138
TotalLiabilitiesandCapital
1400
5-2.
ReportofIncome
TotalInterestIncome
63
TotalInterestExpense
18
NetInterestIncome
?
45
*NetInterestIncomeisTotalInterestIncome
ProvisionforLoanandLeaseLosses
3
LessTotalInterestExpense
TotalNoninterestIncome
39
FiduciaryActivities
2
ServiceChargesonDepositAccounts
6
TradingAccountGainsandFees
?
1
*TherearefourareasofTotalNoninterest
AdditionalNoninterestIncome
30
Incomeandonlyoneismissingandthetotal
TotalNoninterestExpense
42
isgiven
SalariesandBenefits
?
22
*TherearethreeareasofTotalNoninterest
PremisesandEquipmentExpense
5
Expneseandonlyoneismissingandthetotal
AdditionalNoninterestExpense
15
isgiven
PretaxIncome
?
39
*PretaxIncomeisnetinterestincomelessnet
SecuritiesGains(Losses)
1
noninterestincomelessPLL
ApplicableIncomeTaxes
13
IncomeBeforeExtraordinaryIncome
?
27
*PretaxIncomePlusSecurityGainsLess
ExtraordinaryGains
0
Taxesisincomebeforeextraordinaryincome
NetIncome
?
27
andsincethereisnotextraordinaryincome
netincomeisthesame
5-3
NetInterestIncome
85
*TotalInterestIncomeLessTotalInterestExpense
NetNoninterestIncome
-13
*TotalNoninterestIncomeLessTotalNoninterestExpense
Pretaxnetoperatingincome
62
*NetInterestIncomePlusNetNoninterestIncomeandPLL
NetIncomeAfterTaxes
47
*PretaxnetoperatingincomelessPLLlessTaxex
TotalOperatingRevenues
317
*InterestIncomePlusNoninterestIncome
TotalOperatingExpenses
255
*InterestExpensesPlusNoninterestExpensesPlusPLL
IncreasesinUndividedProfit
36
NetIncomeAfterTaxesLessDividends
Assignment4
Chapter5Problem4,6,11
5-4
TotalAssets
429
*TotalLiabilitiesPlusTotalEquityCapital
NetLoans
285
*GrossLoansLessALL
UndividedProfit
15
*TotalEquityCapitallessPSlessCSLessSurplus
InvestmentSecurities
33
*Thisistheonlyassetmissingsosubtractallother
assetsfromtotalassets
Depreciation
5
*Grossequipmentslessnetequipment
TotalDeposits
360
*TotalLiabilitieslessNondepositBorrowings
5-6
a)ThiswouldbepartofAdditionalnoninterestexpenseandpartofTotalNoninterestExpense.
b)ThiswouldbepartofSalariesandBenefitsandpartofTotalNoninterestExpenses.
c)ThiswouldbepartofTotalInterestExpenses.
d)ThiswouldbepartofPLLtogointoreservesforfuturebaddebts.
e)ThiswouldbepartofAdditionalNoninterestIncomeandpartofTotalNoninterestIncome
f)ThiswouldbepartofTotalInterestIncome
g)ThiswouldbepartofServiceChargesonDepositAccountsandthenpartofTotalNoninterestIncome
h)ThiswouldbepartofTotalInterestIncome.
i)ThiswouldbepartofPremisesandEquipmentExpensesandpartofTotalNoninterestExpenses
j)ThiswouldbepartofSecurityGains(Losses)
5-11
TotalInterestIncome(TII)andTotalInterestExpense(TIE):
TII=2TIEandNetInterestIncome=TII–TIE=$800so:
2TIE–TIE=$800TIE=$800andTII=2($800)=$1600
TotalNoninterestIncome(TNI)andTotalNoninterestExpense(TNE):
TNI=.75TNEandNetNoninterestIncome=TNI–TNE=-$300s0:
.75TNE–TNE=-$300-.25TNE=$300TNE=$1200andTNI=.75($1200)=$900
ProvisionforLoanLosses
PLL=.01*TotalInterestIncome=.01*($1600)=$16
Taxes
NetIncomeBeforeTaxes=NetInterestIncome+NetNoninterestIncome–PLL=$800+-$300-$16=$484Taxes=.3*NetIncomeBeforeTaxes=.3*484=$145.2
Dividends
NetIncomeAfterTaxes=NetIncomeBeforeTaxes-Taxes=$484-$145.2=$338.8
IncreaseinUndividedProfit=NetIncomeAfterTaxes–Dividends
Dividends=NetIncomeAfterTaxes–IncreaseinUndividedProfit
Dividends=$338.8-$100=$238.8
Assignment5
Chapter6Problem1,4
6-1
6-4
Assignment6
Chapter6Problem6,8,12
6-6
ROE=ROA*
=0.011*
=0.1337or13.37%
AlternativeScenario1:
newROA=0.011*1.5=0.0165or1.65%.
NewROE=1.65%*12.16=20.06%
AlternativeScenario2:
newROA=0.011*0.5=0.0055or0.55%.
NewROE=0.55%*12.16=6.69%
AlternativeScenario3:
theequitymultiplierremainsthesame,thereisnochangeinROE
AlternativeScenario4:
theratioofthetwo(i.e.,theequitymultiplier)remainsconstant.Asaresult,thereisagainnochangeinROE.
6-8
ROE=ROA*(TotalAssets/EquityCapital)
TotalAssets
=
ROE
=
12%
=9.6x
EquityCapital
ROA
1.25%
IfROAunexpectedlyfallsto0.75%andtargetROEremains12%:
12%
=
.75%
*
TotalAssets
EquityCapital
TotalAssets
=
12%
=16x
EquityCapital
.75%
6-12
a.
NetInterestMargin
=
InterestIncome–InterestExpenses
TotalAssets
=
$65-$48
=
$17
=
0.0172or1.72%
$986
$986
b.
NoninterestMargin
=
NoninterestIncome–NoninterestExpenses
TotalAssets
=
$5-$8
=
-$3
=
-0.0030or-.3%
$986
$986
c.
ROA
=
NetIncome
=
[($65+$5+$2+$1)–($48+$8+$3)]
=
$14
=0.0142or1.42%
TotalAssets
$986
$986
Assignment7
Chapter7Problem10
7-10
DollarInterest-SensitiveGap=ISA–ISL=$300-$175=$125
RelativeInterest-SensitiveGap
=
ISA–ISL
=
$125
=0.25
BankSize
$500
Interest-SensitivityRatio
=
ISA
=
$300
=1.7143
ISL
$175
Assignment8
Chapter7Problem4,5,13,15,16
7-4
Therelevantformulais:
NetInterestMargin=.025=
ThenEarningAssets=$640million.
Ifrevenuesriseby8percentandcostsandearningsassetsriseby9percentnetinterestmarginis:
NetInterestMargin=
=
=0.0237or2.37percent.
7-5
Thecorrectformulais:
.025*(1+.7)=
orNetInterestIncome=0.0425*$763million=$32.4275million.
7-13
Thekeyformulais:
Changeinnetworth=[-DA*
*A]-[-DL*
*L]
Forthechangeininterestratesfrom7to9percent,Watson'snetworthwillchangeto:
ChangeinNetWorth=
=-$168.22million+$119.16million=-$49.06million
Ontheotherhand,ifinterestratesdeclinefrom7to5percentwehave:
ChangeinNetWorth=
=+$168.22mill.-$119.l6mill.=+$49.06million.
7-15
Giventhebankhasadurationgapequaltozero:
DurationGap=
7-16
AssignmentEXTRA-I
Chapter6problem2,3,5
Chapter7problem3,12
6-2
P0=$43.94pershare.
6-3
DepositorsSavings1/(EquityCapital/Assets)=
=1/0.075=13.33x
ROE=
- 配套讲稿:
如PPT文件的首页显示word图标,表示该PPT已包含配套word讲稿。双击word图标可打开word文档。
- 特殊限制:
部分文档作品中含有的国旗、国徽等图片,仅作为作品整体效果示例展示,禁止商用。设计者仅对作品中独创性部分享有著作权。
- 关 键 词:
- FIN260review notes for 08FB 08 FB