Q 1. One of the single best sources o... [FREE SOLUTION]

Chapter 2: Q 1. (page 98)

One of the single best sources of information about financial institutions is the U.S. Flow of Funds report, produced by the Federal Reserve. This document contains data on most financial intermediaries. Go to http:// www.federalreserve.gov/releases/Z1/ and find the most current release. You may have to get Acrobat Reader if your computer does not already have it; the site has a link for a free download. Go to the Level Tables and answer the following questions.
a. What percentage of assets do commercial banks hold in loans? What percentage of assets is held in mortgage loans?
b. What percentage of assets do savings and loans hold in mortgage loans?
c. What percentage of assets do credit unions hold in mortgage loans and in consumer loans?

Short Answer

Expert verified

c. 43.5%; 22%

Step by step solution

Step 1. Introduction

Assets can be defined as resources that have an economic value and are held with the expectation of future benefits real estate holdings, deposits. Liabilities can be defined as the financial obligations that can cause a decrease in future benefits for instance loans.

Step 2. Explanation

(a) The total assets held by commercial banks in the US is 22,561 billions. The loans with commercial banks are $10,773.2 billions.

The percentage of assets held by commercial banks in loans is $\frac{10, 773}{22, 561} 脳 100 = 47.75 %$

(b) The total assets held by savings and loans associations are $3753.8 billion . The ssets held in the form of mortgage loans are $174.2 billion. The percentage of assets in mortgage loans by savings and loans

$\frac{174.2}{3, 753.8} 脳 100 = 4.64 %$

(c) The total financial assets with credit unions are $202.7 billions. The residential mortgages held with credit unions are $88.2 billion. The consumer loans held by credit unions are $44.5 billions.

So, the percentage of assets held in mortgage loans would be

$= \frac{88.2}{202.7} 脳 100 = 43.5 %$