The correct answer is option d i.e. The fed sold a security to the bank
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QUESTION 4 Table 14.3 LEFTBANK Assets Liabilities and Net Worth Deposits with the Fed -$10,000 U.S. Government Secu...
Table: Bank Balance Sheet Bank Balance Sheet Assets Reserves Liabilities& Net Worth S 10,000 Deposits $100,000 100,000 Debt 20,000 0,000Equity 30 Based on the table, owners' equity will fall to zero if loan defaults reduce the value of total assets by__ percent. A. 20 B. 10 О С. 30 D. 40
4. Suppose a bank currently has the following T-Account (all values in USD) : Assets Liabilities + Net worth Loans 210,000 Deposits Government Securities 20,000 Cash Reserves ? Net worth 200,000 ? a. Assuming required reserves of 10% are met exactly by this bank, how much are their cash reserves? b. Assuming required reserves of 10% are met exactly by this bank, how much is its net worth? c. What is the bank's equity multiplier? d. If, in the next...
4. Suppose a bank currently has the following T-Account (all values in USD) : Assets Liabilities + Net worth Loans 210,000 Deposits Government Securities 20,000 Cash Reserves ? Net worth 200,000 a. Assuming required reserves of 10% are met exactly by this bank, how much are their cash reserves? b. Assuming required reserves of 10% are met exactly by this bank, how much is its net worth? C. What is the bank's equity multiplier? d. If, in the next year,...
Question 18 1 pts Table: Bank Balance Sheet Bank Balance Sheet Assets Liabilities & Net Worth Reserves $ 10,000 Deposits $100,000 Loans 100,000 Debt 20,000 Securities 40.000 Equity 30,000 Based on the table, what is the leverage ratio and reserve-deposit ratio at the bank? Would the bank become insolvent (negative capital) with a 10% loss in the value of assets? O 5, 10% and Yes O 3,6.6% and Yes O 5, 10% and No O 3, 10% and No
Table 3-2 Assets Liabilities Bonds Loans Vault cash Deposits at the Fed $250 Deposits $600 $100 $1,000 $50 18) Refer to Table 3-2. Consider the above simplified balance sheet for a bank. If the required reserve ratio, r, is 5%, what are this bank's required reserves, RR? A) $50. B) $100 C) $150. D) $400. 19) According to the quantity theory of money, if the money supply grows at 20% velocity doesn't change, and real GDP grows at 5%, then...
Consider the balance sheet for the Wahoo bank as presented below. Wahoo Bank Balance Sheet Assets Liabilities government securities $1,600 Liabilities: Checking accounts $4,000 Required Reserves $400 Net Worth $1,000 Excess Reserves $0 Loans $3,000 Total Assets $5,000 Total Liabilities $5,000 Using a required reserve ratio of 10% and assuming that the bank keeps no excess reserves, write the changes to the balance sheet for each of the following scenarios: Bennett withdraws $500 from his checking account. The Fed buys...
Bank A Assets Liabilities & Net Worth Reserves $20 Deposits $120 Bonds $10 Borrowing $40 Loans $230 Net Worth $100 Bank B Assets Liabilities & Net Worth Reserves $10 Deposits $150 Bonds $30 Borrowing $20 Loans $260 Net Worth $130 Suppose that there are only two banks in the United States (so that all the banking rules and regulations pertain to the U.S.). The tables above show the balance sheets of these two banks at a point in time. The...
Balance Sheet of Big-But-Simple Bank (BBSB) Assets Liabilities and Net Worth Loans $300 billion Deposits $240 billion Equity $60 billion The table above shows the balance sheet of Big-But-Simple Bank (BBSB). This bank has taken $60 billion of shareholders' equity and leveraged it: Answer: ______ to ______.
QUESTION 1 0.8 points Saved Assets Liabilities Reserves $100 Loans T-Bills Deposits S1,000 800 100 Refer to this scenario for all of the questions on this problem set Suppose the balance sheet shown is for the only bank in the banking system. The reserve requirement is 10%. If the Fed buys $50 worth of T-bills from this bank, immediately after that exchange, before the bank expands its lending in response, the bank's reserves would equal 150 QUESTION 2 0.8 points...
How would each of the following transactions show up on the U.S. balance-of-payments accounts? a. Payment of $50 million in Social Security to U.S. citizens living in Costa Rica. b. Sale overseas of 125,000 Elvis Presley CDs. c. Tuition receipts of $3 billion received by American universities from foreign students d. Payment of $1 million to U.S. consultants A.D. Little by a Mexican company e. Sale of a $100 million Eurobond issue in London by IBM f. Investment of $25...