Homework Answers
Total deposits = $20,000
Reserve requirement = 10% or 0.10
Required reserves = Total deposits * Reserve requirement
Required reserves = $20,000 * 0.10 = $2,000
The Fictional First Bank has to maintain $2,000 as required reserves.
Total reserves = $3,100
Excess reserves = Total reserves - Required reserves = $3,100 - $2,000 = $1,100
The Fictional First Bank has $1,100 as excess reserves.
A bank can lend all its excess reserves.
So, Fictional First Bank can lend a maximum amount of $1,100 and still meet the reserve requirement.
Hence, the correct answer is the option (d) [$1,100].
Add Answer to:
Assets Reserves Loans Securities Liabilities $3100 Deposits $15,000 Debt $5,000 $20,000 $2000 Balance sheet for Fictional...
Assets Liabilities Loans Deposits $65 million Required Reserves Excess Reserves $2 million Treasury Securities $5 million...
Assets Liabilities Loans Deposits $65 million Required Reserves Excess Reserves $2 million Treasury Securities $5 million The Fed sets a reserve requirement of 3% on deposits between $16 million and $122 million. If the bank holds $5 million dollars in US Treasury Securities and $2 million in excess reserves, compute the bank’s required reserve level and the quantity of loans this bank is able to make to the public. What is the value of the money multiplier? [Money Multiplier =...
Assets Liabilities + Net Worth Reserves $120,000 Checkable Deposits $300,000 Loans 140,000 Stock Shares 200,000 Securities...
Assets Liabilities + Net Worth Reserves $120,000 Checkable Deposits $300,000 Loans 140,000 Stock Shares 200,000 Securities 40,000 Property 200,000 The accompanying balance sheet is for the First Federal Bank. Assume the required reserve ratio is 20 percent. If the original bank balance sheet was for the whole commercial banking system rather than a single bank, loans and deposits could have been expanded by a maximum of: $40,000. $100,000. $200,000. $300,000.
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...
Bank's Balance Sheet Liabilities and Owners' Equity Assets Reserves $150 Deposits $1,200 Loans $600 Debt $200...
Bank's Balance Sheet Liabilities and Owners' Equity Assets Reserves $150 Deposits $1,200 Loans $600 Debt $200 Securities $750 Capital (owners' equity) $100 Suppose a new customer adds $100 to his account at Southwestern Mutual Bank, which the owners of the bank then use to make $100 worth of new loans. This would increase the loans account and the account. This would also bring the leverage ratio from its initial value of to a new value of Which of the following...
- + Automatie Zoom : Exhibit 1: Bountiful Bank Assets Liabilities $400,000 Reserves Loans Deposits $...
- + Automatie Zoom : Exhibit 1: Bountiful Bank Assets Liabilities $400,000 Reserves Loans Deposits $ 50,000 $350,000 3. Use the balance sheet in Exhibit 1. Suppose the reserve requirement for this bank, Bountiful Bank, is 10 percent. Which of the following statements is (are) correct? (x) Given its current reserves amount, Bountiful Bank is in a position to make a new loan of $10,000 (y) Bountiful Bank has excess reserves in an amount that is more than $9,500 (z)...
C. Consider the following bank balance sheet Freedom Bank Assets Liabilities Reserves $1200 Deposits $9000 Loans...
C. Consider the following bank balance sheet Freedom Bank Assets Liabilities Reserves $1200 Deposits $9000 Loans $8000 Debt $800 Securities $800 Net Equity 1. What is the net equity of this bank? 2. What is Freedom Bank's leverage ratio? 3. What does the number you got from C2 mean in plain words? What does it mean for the safety of the bank? 4. What is the bank's reserve ratio?
27. The table below shows the Acme Bank's balance sheet. Acme Bank's Balance Sheet Assets Liabilities...
27. The table below shows the Acme Bank's balance sheet. Acme Bank's Balance Sheet Assets Liabilities Reserves $20,000 Deposits _ Loans If the required reserve ratio is 25% and the Acme Bank holds no excess reserves, deposits are $15,000. $80,000. O $60,000 O $5,000.
1. Assume the following balance sheet for a commercial bank: Assets Liabilities Reserves 100 Demand Deposits...
1. Assume the following balance sheet for a commercial bank: Assets Liabilities Reserves 100 Demand Deposits 1000 Government Bonds 400 Time Deposits 500 Mortgages 1000 Commercial Paper 400 Loans 500 Capital 100 Remember, for the balance sheet to balance, assets=liabilities + capital (or shareholder equity) The reserve requirement is 10% of demand deposits. a. Suppose the bank is required to keep 15% of its risk-weighted assets in the form of capital. The risk weights are 0 for reserves and government...
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...
Assets Reserves Loans Liabilities $3,000 Deposits $450 $2,550 The required reserve ratio is 12 percent. Given...
Assets Reserves Loans Liabilities $3,000 Deposits $450 $2,550 The required reserve ratio is 12 percent. Given its deposits of $3,000, the bank is required to hold $ 360 as reserves. (Enter your response as an integer.) The bank holds excess reserves of $ 90. (Enter your response as an integer.) The bank can increase its loans by $ 750 . (Round your response to two decimal places.) Suppose a depositor comes to the bank and withdraws $200 in cash. Show...
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...
Bank's Balance Sheet Liabilities and Owners' Equity Assets Reserves $150 Deposits $1,200 Loans $600 Debt $200 Securities $750 Capital (owners' equity) $100 Suppose a new customer adds $100 to his account at Southwestern Mutual Bank, which the owners of the bank then use to make $100 worth of new loans. This would increase the loans account and the account. This would also bring the leverage ratio from its initial value of to a new value of Which of the following...
- + Automatie Zoom : Exhibit 1: Bountiful Bank Assets Liabilities $400,000 Reserves Loans Deposits $ 50,000 $350,000 3. Use the balance sheet in Exhibit 1. Suppose the reserve requirement for this bank, Bountiful Bank, is 10 percent. Which of the following statements is (are) correct? (x) Given its current reserves amount, Bountiful Bank is in a position to make a new loan of $10,000 (y) Bountiful Bank has excess reserves in an amount that is more than $9,500 (z)...
C. Consider the following bank balance sheet Freedom Bank Assets Liabilities Reserves $1200 Deposits $9000 Loans $8000 Debt $800 Securities $800 Net Equity 1. What is the net equity of this bank? 2. What is Freedom Bank's leverage ratio? 3. What does the number you got from C2 mean in plain words? What does it mean for the safety of the bank? 4. What is the bank's reserve ratio?
27. The table below shows the Acme Bank's balance sheet. Acme Bank's Balance Sheet Assets Liabilities Reserves $20,000 Deposits _ Loans If the required reserve ratio is 25% and the Acme Bank holds no excess reserves, deposits are $15,000. $80,000. O $60,000 O $5,000.
Assets Reserves Loans Liabilities $3,000 Deposits $450 $2,550 The required reserve ratio is 12 percent. Given its deposits of $3,000, the bank is required to hold $ 360 as reserves. (Enter your response as an integer.) The bank holds excess reserves of $ 90. (Enter your response as an integer.) The bank can increase its loans by $ 750 . (Round your response to two decimal places.) Suppose a depositor comes to the bank and withdraws $200 in cash. Show...
Most questions answered within 3 hours.
-
Given the function below, F(w,x,y,z)= x’z+w’z’+w’y
a) draw a logic diagram for an implementation which uses...
asked 9 minutes ago -
This assignment will explore the impact of corporate decisions
on a local versus a global perspective....
asked 33 minutes ago -
Most political philosophers believe we have a duty to obey laws,
even if the laws in...
asked 1 hour ago -
Which of the following are common negotiation outcome
mistakes?
a. Leave money on the table b....
asked 1 hour ago -
Propose an efficient synthesis of 2-Bromo-5-nitrotoluene from
benzene. Hint: 3 steps. Consider directing effects of substituents....
asked 1 hour ago -
Convert the following quantities:
a) 0.819 atm to torr b) 512 mmHg to bar c) 11.2...
asked 1 hour ago -
C ++ Implement cat command
The purpose of this assignment is to provide practice using the...
asked 1 hour ago -
we
convert sugars into another form of stored potential energy. This
is called?
asked 2 hours ago -
The manufacturers of Oriental Spice Sauce are concerned that the
sodium levels in their product vary...
asked 3 hours ago -
PLEASE DON'T ANSWER IF YOU CAN'T ANSWER ALL OF THE QUESTIONS. I
DESPERATELY NEED HELP
Consider...
asked 3 hours ago -
DO NOT ANSWER IF YOU ARE UNSKILLED IN THIS AREA! TYPE OR WRITE
EACH ANSWER CLEARLY!!...
asked 3 hours ago -
how many moles of sodium are there in 3.41 moles of the
following compounds
NaCl
Na2SO4...
asked 3 hours ago