9. Bank leverage Use the information given in Upper Midwest National Bank's balance sheet to answer the following questions. Assets Reserves Loans Bank's Balance Sheet $125 Liabilities and Owners' Equity $1,250 Deposits $625 Debt Securities $500 Capital (owners' equity) Suppose a new customer adds $100 to his account at Upper Midwest National Bank, which the owners of the bank then use to make $100 worth of new loans. This would increase the loans account and increase the debt account. $75 This would also bring the leverage ratio from its initial value of -16.67 to a new value of -18.00 The riskiness of each asset -$75 Which of the following do bankers consider when deciding how to allocate their assets? Check all that apply. The size of the monetary base ✔The total value of liabilities

9. Bank leverage Use the information given in Upper Midwest National Bank's balance sheet to answer the following questions. Assets Reserves Loans Bank's Balance Sheet $125 Liabilities and Owners' Equity $1,250 Deposits $625 Debt Securities $500 Capital (owners' equity) Suppose a new customer adds $100 to his account at Upper Midwest National Bank, which the owners of the bank then use to make $100 worth of new loans. This would increase the loans account and increase the debt account. $75 This would also bring the leverage ratio from its initial value of -16.67 to a new value of -18.00 The riskiness of each asset -$75 Which of the following do bankers consider when deciding how to allocate their assets? Check all that apply. The size of the monetary base ✔The total value of liabilities

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Monetary System

Section: Chapter Questions

Problem 6PA

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Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 44Deposits 255Loans 155 Securities 51Other $X Using the balance sheet above, find the level of excess reserves this bank is holding if the required reserve ratio = 6%(Give answers to 2 decimal places as needed)
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