1. Jackie received $10 000 and deposits it in CIBC. TheCurrent RRR is 12.5%.What is the expected change in deposits?2. You place $9 700 into the bank which was able to createcredit worth $106 700.What is the credit creation multiplier?3. You are given the following information:Initial Deposit $2 750Change in deposits $11 000Calculate the RRR.4. A customer deposits money into a bank which was able tocreate $10 000 000 in credit from it. The RRR is 10%.What was the value of the initial deposit?

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1. Jackie received $10 000 and deposits it in CIBC. The Current RRR is 12.5%. What is the expected change in deposits?

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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Question

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1. Jackie received $10 000 and deposits it in CIBC. The
Current RRR is 12.5%.
What is the expected change in deposits?
2. You place $9 700 into the bank which was able to create
credit worth $106 700.
What is the credit creation multiplier?
3. You are given the following information:
Initial Deposit $2 750
Change in deposits $11 000
Calculate the RRR.
4. A customer deposits money into a bank which was able to
create $10 000 000 in credit from it. The RRR is 10%.
What was the value of the initial deposit?

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