Use the information presented in Southwestern Mutual Bank's balance sheet to answer the following questions. Assets Liabilities and Owners' Equity
Reserves $200 Deposits $675
Loans $800 Debt $250
Securities $1,000 Capital (owners'equity) $1,075

Requried:
1. Suppose a new customer adds $100 to his account at Midwestern Mutual Bank, which the owners of the bank then use to make $100 worth of new loans.

a. This would increase the loans account and the deposits account.
b. This would also bring the leverage ratio from its initial value of to a new value of .

2. Which of the following do bankers take into account when determining how to allocate their assets? Check all that apply.

a. The size of the monetary base.
b. The total value of liabilities.
c. The reserve requirement.

Acompany that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. prior to buying the new equipment, the company used 6 workers, who produced an average of 79 carts per hour. workers receive $16 per hour, and machine coast was $49 per hour. with the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $11 per hour while output increased by four carts per hour. a) compute the multifactor productivity (mfp) (labor plus equipment) under the prior to buying the new equipment. the mfp (carts/$) = (round to 4 decimal places). b) compute the productivity changes between the prior to and after buying the new equipment. the productivity growth = % (round to 2 decimal places)

Security a has a higher standard deviation of returns than security b. we would expect that: (i) security a would have a risk premium equal to security b. (ii) the likely range of returns for security a in any given year would be higher than the likely range of returns for security b. (iii) the sharpe ratio of a will be higher than the sharpe ratio of b. (a) i only (b) i and ii only (c) ii and iii only (d) i, ii and iii

The following are line items from the horizontal analysis of an income statement:increase/ (decrease) increase/ (decrease) 2017 2016 amount percent fees earned $120,000 $100,000 $20,000 20% wages expense 50,000 40,000 10,000 25 supplies expense 2,000 1,700 300 15 which of the items is stated incorrectly? a. fees earned b. supplies expense c. none of these choices are correct. d. wages expense