: The balance sheet for Maritime Bank as of yesterday is shown below. Use the balance sheet below to answer the questions. The required reserve ratio is 12%. Calculate the bank's excess reserves. Suppose a depositor wanted to transfer $200,000 out of their checking account to another bank. Could Maritime honor that request? How would Maritime need to change their balance sheet to be appropriately managing their liquidity? From the original balance sheet, suppose the bank expects interest rates to rise which would impact the value of their government bonds. Suppose the price of the 10 year Treasury bonds is expected to change by 6%. Would this cause a problem for the bank? Why or why not? Asset Liabilities Vault Cash 300,000 Checkable 3,400,000 Deposits Reserves at the 400,000 Saving Deposits 4,500,000 Fed 30 day Treasury 2,600,000 Long-term 1,400,000 Bills Time Deposits 10 year Treasury Bonds 1,940,000 Discount Loans Mortgages 3,960,000 Federal Funds Loans Federal Funds 800,000 Bank Loans Capital
: The balance sheet for Maritime Bank as of yesterday is shown below. Use the balance sheet below to answer the questions. The required reserve ratio is 12%. Calculate the bank's excess reserves. Suppose a depositor wanted to transfer $200,000 out of their checking account to another bank. Could Maritime honor that request? How would Maritime need to change their balance sheet to be appropriately managing their liquidity? From the original balance sheet, suppose the bank expects interest rates to rise which would impact the value of their government bonds. Suppose the price of the 10 year Treasury bonds is expected to change by 6%. Would this cause a problem for the bank? Why or why not? Asset Liabilities Vault Cash 300,000 Checkable 3,400,000 Deposits Reserves at the 400,000 Saving Deposits 4,500,000 Fed 30 day Treasury 2,600,000 Long-term 1,400,000 Bills Time Deposits 10 year Treasury Bonds 1,940,000 Discount Loans Mortgages 3,960,000 Federal Funds Loans Federal Funds 800,000 Bank Loans Capital
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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