Note: You must use formulas and cell references when computing all values in the GREEN CELLS. 1. Consider a bank policy to maintain 12% of deposits as reserves. The bank currently has $10 million in deposits and holds $400,000 excess reserves.What is the required reserve on a new deposit of $50,000?Solution:Required reserve ratio + excess reserve ratio =Excess reserve ratio =Required reserve ratio =The required reserve is:

To calculate the required reserve for a new deposit of $50,000 based on the given data:1. Required…

Answered: 1. Consider a bank policy to maintain…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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2. Assume that a particular bank has excess reserves of Php800,000 and checkable deposits of Php1,500,000. If the reserve ratio is 20%, what is the size of the bank's actual reserves?
A bank has $400 million in demand deposits and desires a 20 percent reserve ratio. How much will it hold as reserves? O a. $200 million O b. $120 million O c. $80 million O d. $500 million
D1. Please redraw the balanced T-account.
If a bank has $200,000 of deposits, a required reserve ratio of 20 percent, and $80,000 in reserves. What would be the maximum deposit outflow the bank can sustain?
2. Use the table below to answer questions a,b and c. rr = 20% Assets Liabilities R = 20,000 D = 100,000 S=70,000 L = 50,000 OE=40,000 TA-140,000 TL = 140,000 a) Using a new balance sheet, show how the balance sheet above will change if a customer deposits $10,000 cash. Assume that the bank holds exactly the amount of reserves required. b) How much will the total money supply potentially change as a result of the $10,000 cash deposit, once the full money multiplier process is completed? Show your calculation.
Suppose that some commercial bank has $100M in deposits and $20M in capital. Assuming a 10% minimum reserve ratio, what is the maximum amount of loans and securities this bank can own? (exclude inter-bank loans as a possibility for this question)
Suppose a bank has $1,000 in deposits and $100 in reserves. If the desired reserve ratio is 5 percent, how much can this bank increase its loans? O a. $50 O b. $80 O c. $0 O d. $400 O e. $100
PLEASE SOLVE
If R = 25%, actual reserves are $2,000 and checkable deposits are $9,000, then the monetarymultiplier is ____, required reserves are $____, excess reserves are $____, and the bankingsystem could potentially expand the money supply by $____.
Suppose a bank has the following Balance Sheet Assets Liabilities RSA = 120 RSL = 90 FRL = X FRA = 110 (Fixed rate liabilities can be found if needed by determining what number it must be to balance the balance sheet.) Suppose all the Assets and Liabilities were set last year when the interest rate was 10, if the interest rate has changed by 2% since that time what is the current cost from all of the bank's liabilities? Your Answer:
We have the following information about a bank's balance sheet. Rate sensitive assets = $10,000,000 Fixed-rate assets = $20,000,000 Rate sensitive liabilities = $4,000,000 Fixed-rate liabilities = $26,000,000 Let's do a simple gap analysis. If the interest rate falls by 5 percent, O a. The bank will lose $300,000. O b. The bank will lose $500,000. O c. The bank will lose $200,000. O d. The bank will gain $300,000. O e. The bank will gain $200,000.
Suppose banks desire to hold no excess reserves and that the Fed has set a reserve requirement of 20 percent. If you deposit $18,000 into First Jayhawk Bank, a. First Jayhawk's required reserves increase by $1,800. b. First Jayhawk will be able to lend out $16,200. c. First Jayhawk's assets and liabilities both will increase by $18,000. d. All of the above are correct.

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