|Conceptual / Calculation Question Suppose a bank's balance sheet looks as follows: Assets Liabilities Reserves $ 700 Deposits $6,000 Loans 5,300 The banks are required to hold reserves equal to 10 percent of deposits. a. How much excess reserves does the bank hold? b. How much more can this bank lend? c. Explain the concept of fractional reserve banking!

|Conceptual / Calculation Question Suppose a bank's balance sheet looks as follows: Assets Liabilities Reserves $ 700 Deposits $6,000 Loans 5,300 The banks are required to hold reserves equal to 10 percent of deposits. a. How much excess reserves does the bank hold? b. How much more can this bank lend? c. Explain the concept of fractional reserve banking!

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter7: Types And Costs Of Financial Capital

Section: Chapter Questions

Problem 1bM

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The whole task is attached in the photo
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