Here again is the balance sheet information for Cipher Bank

Here again is the balance sheet information for Cipher Bank. It will be repeated in future questions to make things a bit easier. Note that you can, and may have to, calculate anything marked with a \"???,\" and anything not included or otherwise calculable $0. Assets Liabilities and Owner\'s Equity Buildings and furniture $900 Checking depos Cash $80 Commercial paper $500 Deposit in the Fed $320 Government agency bonds $800 oroig trom the Fe Home mortgages $1200 Loan to Bank A $400 Loans to firms $1100 Loans to households $1300 Municipal bonds $1400 US government bonds $600 Savings deposits $800 Time deposits $200 Borrowing from Bank B $500 Other liabilities $1000 Equity $??? Total assets $8600 Total liabilities and owner\'s equity ???

Solution

Here, Equity is Total Assets - Total Liabilities = 8600 - 6200 = $ 2400

Rate Sensitive Assets = Home mortgages (1200x0.80=960) + Loan to Bank ($400) + Loan to HH ($ 1300) + Loan to Firm ( $550) + Commercial Paper ($ 500) + Deposit in Fed ( 320) + Govt Agency Bonds (800) + Bonds (2000) = $ 6830

Rate Sensitie Liabilities = Borrowing from Banks and Fed = $ 2100

Thus GAP = RSA - RSL = $ 6830 - $ 2100 = $ 4730