![29.A small state bank currently has reserves equal to $500,000. If the state reserve requirement is 10%, but the bank feels more comfortable with maintaining a 20% reserve, a/ [2 pts] What amount of deposits does the bank currently have? b/ [1 pt] What amount of reserves would the bank need to meet the reserve requirement exactly? What would be the excess reserve?](http://img.homeworklib.com/questions/38c65020-7480-11eb-9cfd-e5c032f30b29.png?x-oss-process=image/resize,w_560)
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29.A small state bank currently has reserves equal to $500,000. If the state reserve requirement is...
Consider the following Bank balance sheet (assume Reserve Requirement Ratio is zero) Liabilities Assets Excess Reserves...
Consider the following Bank balance sheet (assume Reserve Requirement Ratio is zero) Liabilities Assets Excess Reserves +10M Deposits +100M Government Bonds £20M Loans Ł80M Bank Capital +10M a. Suppose interest rate on loans and government bonds is 10%, interest rate on deposits is 8%, and interest rate on excess reserves is 0%. What is the Bank's net return on assets? Compute the return on equity. b. Suppose the risk weights imposed by the bank regulator on loans, securities, and reserves...
What is the answer? 10. A man deposited 500,000 to City-Bank. The reserve requirement is 20%...
What is the answer?
10. A man deposited 500,000 to City-Bank. The reserve requirement is 20% of total deposits, and the bank does not hold any excess reserves. a. Create a balance sheet of City-Bank with the given information. b. What is the money multiplier and what is the total money that the entire banking system creates. c. use answer in b, and assuming no capital drain, what should be the new legal reserve requirement if the Central bank aims...
Suppose the banking system currently has $400 billion in reserves, the reserve requirement is 8...
Suppose the banking system currently has $400 billion in reserves, the reserve requirement is 8 percent, and excess reserves amount to $5 billion. What is the level of deposits? Selected Answer: d. $4,937.5 billion Answers: a. $5,062.5 billion b. $4,995 billion c. $5,000 billion
Bank currently has $1,200 million in transaction deposits on its balance sheet. The current reserve requirement...
Bank currently has $1,200 million in transaction deposits on its balance sheet. The current reserve requirement is 12 percent, but the Federal Reserve is decreasing this requirement to 10 percent. a. Show the balance sheet of the Federal Reserve and National Bank if National Bank converts all excess reserves to loans, but borrowers return only 50 percent of these funds to National Bank as transaction deposits. b. Show the balance sheet of the Federal Reserve and National Bank if National...
A bank has a reserve requirement of 50% and no excess reserves. If a new customer...
A bank has a reserve requirement of 50% and no excess reserves. If a new customer deposits $100 million, the bank can make a maximum new loan of: $10 million $50 million $90 million $100 million
If a bank has excess reserves of $3 000 and the reserve requirement is 20%, the...
If a bank has excess reserves of $3 000 and the reserve requirement is 20%, the maximum amount of potential increase in the money supply is $600. O False O True Which entity acts to protect depositors from a bank run by insuring all deposits up to $100 000? O the Parliamentary Budget Office O the Ministry of Finance of Justice O the CDIC O the Bank of Canada
The Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio...
The Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio is 20 percent. Using balance sheet A, how would this look. How much excess reserves currently exist for the bank? Households deposit $5000 in currency into the bank that is added to reserves. (Show this addition on the balance sheet A. What level of excess reserves does the bank now have? Assuming the excess reserves become loans, what would this look like on the...
6. Required and excess reserves Suppose that Second Republic Bank currently has $200,000 in demand deposits...
6. Required and excess reserves Suppose that Second Republic Bank currently has $200,000 in demand deposits and $130,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. Reserves (Dollars) Second Republic Required Reserves (Dollars) Excess Reserves (Dollars)
2. Required and excess reserves Suppose that Best National Bank currently has $100,000 in checkable deposits...
2. Required and excess reserves Suppose that Best National Bank currently has $100,000 in checkable deposits and $65,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. Using these values, fill in the empty cells for reserves, required reserves, and excess reserves in the following table Best National Reserves Required Reserves Excess Reserves (Dollars) (Dollars) (Dollars)
If a bank has $100 million in deposits with a reserve requirement of 0.05, (a) How...
If a bank has $100 million in deposits with a reserve requirement of 0.05, (a) How much are its required reserves? million (b) How much excess reserves does it have? million (c) How much can it lend? $ million
Consider the following Bank balance sheet (assume Reserve Requirement Ratio is zero) Liabilities Assets Excess Reserves +10M Deposits +100M Government Bonds £20M Loans Ł80M Bank Capital +10M a. Suppose interest rate on loans and government bonds is 10%, interest rate on deposits is 8%, and interest rate on excess reserves is 0%. What is the Bank's net return on assets? Compute the return on equity. b. Suppose the risk weights imposed by the bank regulator on loans, securities, and reserves...
What is the answer?
10. A man deposited 500,000 to City-Bank. The reserve requirement is 20% of total deposits, and the bank does not hold any excess reserves. a. Create a balance sheet of City-Bank with the given information. b. What is the money multiplier and what is the total money that the entire banking system creates. c. use answer in b, and assuming no capital drain, what should be the new legal reserve requirement if the Central bank aims...
If a bank has excess reserves of $3 000 and the reserve requirement is 20%, the maximum amount of potential increase in the money supply is $600. O False O True Which entity acts to protect depositors from a bank run by insuring all deposits up to $100 000? O the Parliamentary Budget Office O the Ministry of Finance of Justice O the CDIC O the Bank of Canada
6. Required and excess reserves Suppose that Second Republic Bank currently has $200,000 in demand deposits and $130,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. Reserves (Dollars) Second Republic Required Reserves (Dollars) Excess Reserves (Dollars)
2. Required and excess reserves Suppose that Best National Bank currently has $100,000 in checkable deposits and $65,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. Using these values, fill in the empty cells for reserves, required reserves, and excess reserves in the following table Best National Reserves Required Reserves Excess Reserves (Dollars) (Dollars) (Dollars)
If a bank has $100 million in deposits with a reserve requirement of 0.05, (a) How much are its required reserves? million (b) How much excess reserves does it have? million (c) How much can it lend? $ million
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