Question

You know the following information about the Miller State Bank: Gross loans $300 Miscellaneous assets 50...

You know the following information about the Miller State Bank:

Gross loans $300

Miscellaneous assets 50

Deposits 390

Total equity 50

Common stock par 5

Non-deposit borrowings 60

Investment securities 150

Net premises 40

Surplus 5

Allowance for loan losses 50

total assets 500

gross premises 70

Given this information, what is the vaule of this firms net loans?

a)250

b)350

c)500

d)50

e)150


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Answer #1

Ans. Option A $250

Calculations:  

Net loans = Gross loans - Allowance for loan losses

= $300 - $50

= $250

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