21' Your bank has the following balance sheet: Assets Reserves $ 50 million. Securities Loans 50 million 150 million Liabilities Checkable deposits $200 million Bank capital If the required reserve ratio is 20%, what impact would an unexpected deposit outflow of $50 million have on the bank's balance sheet? That is, what would the new balance sheet look like? Does the bank have a liquidity issue? Explain. Describetwo actions that you might recommend the bank manager take if there is an unexpected deposit outflow of $50 million? What option would you least prefer to use of all the possible actions a bank might take? 50 million

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
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21'
Assets
Reserves
Securities
Loans
Your bank has the following balance sheet:
$ 50 million.
50 million
150 million
Liabilities
Checkable deposits
$200 million
Bank capital
If the required reserve ratio is 20%, what impact would an unexpected deposit outflow of $50 million have on the
bank's balance sheet? That is, what would the new balance sheet look like? Does the bank have a liquidity issue?
Explain. Describetwo actions that you might recommend the bank manager take if there is an unexpected deposit
outflow of $50 million? What option would you least prefer to use of all the possible actions a bank might take?
50 million.
Transcribed Image Text:21' Assets Reserves Securities Loans Your bank has the following balance sheet: $ 50 million. 50 million 150 million Liabilities Checkable deposits $200 million Bank capital If the required reserve ratio is 20%, what impact would an unexpected deposit outflow of $50 million have on the bank's balance sheet? That is, what would the new balance sheet look like? Does the bank have a liquidity issue? Explain. Describetwo actions that you might recommend the bank manager take if there is an unexpected deposit outflow of $50 million? What option would you least prefer to use of all the possible actions a bank might take? 50 million.
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