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# Banking and the management of financial institutions

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1. The balance sheet of Tribank starts with an allowance for loan losses of \$1.33 million. During the year, TriBank charges off worthless loans of \$0.84 million, recovers \$0.22 million on loans previously charged off, and charges current income for \$1.48 million provision for loan losses. calculate the end-of-year allowances for loan losses.

2. For the up coming week, Nobel National Bank plans to issue \$25 million in mortgages and purchase \$100 million 31-day T-bills. New deposits of \$35 million are expected, and other sources will generate \$15 million in cash. What is Nobel's estimate of funds needed?

3. A bank estimates that demand deposits are, on average, \$100 million with a standard deviation of \$5 million. Than bank wants to maintain a minimum of 8% of deposits in reserves at all times. What is the highest expected level of deposits during the month? What reserves do they need to maintain? Use a 99% confidence level.

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1. The balance sheet of Tribank starts with an allowance for loan losses of \$1.33 million. During the year, TriBank charges off worthless loans of \$0.84 million, recovers \$0.22 million on loans previously charged off, and charges current income for \$1.48 million provision for loan losses. calculate the end-of-year allowances for loan losses.

Beginning balance for allowance for loan losses \$1.33
Less charges off worthless loans \$0.84
Add recovers on loans previously charged off \$0.22