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Question
Given the following information, determine the net income (NI) of the bank. The loan and deposit rates are 12 percent and 3 percent, respectively. The money rate is 2 percent, and it is the benchmark of the profitability of loans and deposits. It is also the measure used to debit the lack of earning ability of cash reserves at the Federal Reserve, and it is the opportunity cost of equity capital. Other expenses are $40 million. The balance sheet information is in millions of dollars.
a) $11.46
b) $14.82
c) $15.48
d) $16.14
Answer
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