probanker game final paper The final report is intended to mimic a shareholders report to some degree. In this report, be sure to include:-Title page-Table of contents-Letter to shareholders (an Executive Summary of the report)-Description of bank and bank ‘managers’-Financial highlights sectiono What is your bank’s strategy? What were the most important drivers of profitability? Which risk category did the bank manage well? Which risk category could use improvement?-Sources of Funds, Uses of Funds, Risk, and Profitability — address the questions below.-Future directions section (highlight changes you would make based on what was learned).-Include consolidated income statements, balance sheets, cost of funds analysis, and ratio analysis as an appendix (include these as a screenshot or tables at the end of the document, not as a separate file). probanker game final paper Throughout the report, don’t list the decisions you made quarter by quarter. Instead talk about your decisions with respect to risks, performance and your strategy.Take care in making sure that you address the questions below in your write up:1. What are the bank’s major sources of funds? How much does your institution rely on deposits/borrowed funds?Carefully analyze the cost of each source of funds (recall the Total Cost of Borrowed Funds exercise). Describe how managing these costs affected firm performance.What is your bank’s weighted average cost of funds (including the discount window)?2. What are the bank’s major uses of funds? Analyze your institution’s investment and loan portfolios. Carefully analyze the profitability of each use of funds (recall the Net Return of Assets exercise). Describe how managing the different uses of funds affected firm performance. probanker game final paperWhat is your bank’s weighted average net return on funds? What is the spread between your weighted average net return on funds and your weighted average cost of funds (including the discount window)?3. Analyze and evaluate the performance of your bank. Focus on two dimensions – performance and risk.Evaluate the risk position of your institution considering the following risks identified in class: interest rate, liquidity, credit, and capital risk – be sure to address each of these. o Consider what you could partially control in the game and the related ratios or techniques that can be employed to manage and measure these risks. o Has the risk of your institution changed over the duration of the game?o Which risk concerns you the most? o Have any of these changes in risk been associated with changes in the firm’s performance? probanker game final paper Evaluate the performance of the bank over the duration of the game. o What are the trends in the different measures and components of earnings?o Has ROE changed any? If so, why? If not, why not? (Complete the decomposition of ROE analysis)Don’t just describe the numbers; explain how your bank’s decisions affected the measures of performance.Were there changes in the asset or liability composition that lead to changes in the ROE? i.e. did your composition(mix) change?How did changes to the volume of interest earning assets and interest bearing liabilities affect your ROE?Were there changes in your noninterest income or noninterest expense that lead to changes in the ROE?Are the changes in ROE due to changes in the level of operating efficiency and/or financial leverage?probanker game final paper o Calculate the total return for your bank. Make sure to consider both dividends and capital gains/losses when calculating the total return.
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