Queen Savings is attempting to determine its liquidity requirements today (the last day in August) for the month of September. This thrift institution has analyzed its deposit accounts thoroughly and classified them as explained below. Management has elected to hold 85% reserve in liquid assets or borrowing capacity for each dollar of hot money deposits, 25% reserve behind vulnerable deposits, and 5% reserve for its holdings of core funds. Assume time deposits carry a zero percent reserve requirement and all checkable deposits carry 3% reserve requirement. Queen currently has total loans outstanding of $2,500 million, and expects that its loans to grow to $2,550 million. Find the estimates for Queen's total liquidity requirement for September. Millions of Dollars Hot money funds Vulnerable funds Stable (core) funds Checkable Deposits Time Deposits 1,200 740 240 110 165 185

Queen Savings is attempting to determine its liquidity requirements today (the last day in August) for the month of September. This thrift institution has analyzed its deposit accounts thoroughly and classified them as explained below. Management has elected to hold 85% reserve in liquid assets or borrowing capacity for each dollar of hot money deposits, 25% reserve behind vulnerable deposits, and 5% reserve for its holdings of core funds. Assume time deposits carry a zero percent reserve requirement and all checkable deposits carry 3% reserve requirement. Queen currently has total loans outstanding of $2,500 million, and expects that its loans to grow to $2,550 million. Find the estimates for Queen's total liquidity requirement for September. Millions of Dollars Hot money funds Vulnerable funds Stable (core) funds Checkable Deposits Time Deposits 1,200 740 240 110 165 185

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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Alexa Company had the following bank reconciliation on June 30: Balance per bank statement, June 30 - 3,000,000; Deposit in transit - 400,000; Outstanding checks - 900,000. The bank statement for the month of July showed the following: Deposits, including 200,000 note collected for Alexa - 9,000,000; Disbursements, including 140,000 NSF customer check and 10,000 service charge - 7,000,000. All reconciling items on June 30 cleared through the bank in July. The outstanding checks totaled 600,000 and the deposit in transit amounted to 1,000,000 on July 31. What is the adjusted cash in bank on July 31?
Question: Given below is the balance sheet for the Bank of New Providence: Assets ($1,000,000s) Liabilities ($1,000,000s) Cash 52 Deposits 650 T-bills and Bonds 257 Long-term debt 326 Loans to Other Banks 95 Equity 88 Commercial Loans 364 Mortgages 296 Total 1,064 Total 1,064 The net profit for the bank was $10.3 million. A required reserve is specified at 5% of deposits. What is the bank's ROA?
The money creation process Suppose Southeast Mutual Bank, Walls Fergo Bank, and PJMorton Bank all have zero excess reserves. The required reserve ratio is presently set at 20%. Brian, a Southeast Mutual Bank customer, deposits $1,500,000 into his checking account at the local branch. Complete the following table to reflect any changes in Southeast Mutual Bank's T-account (before the bank makes any new loans). Assets Liabilities 2 categories under Assets: 1. Building and furniture, Deposits, Loans, Net worth or Reserves 2. $300,000 or $1,200,000 or $1,500,000 or $3,600,000 2 Categories under Liabilities: 1. Building and furniture, Deposits, Loans, Net worth or Reserves 2. $300,000 or $1,200,000 or $1,500,000 or $3,600,000 Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 20%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in…
If Service World has $1,950 cash, $400 of government Treasury bills purchased last month with a six-week maturity, and $940 of cash set aside for legal reasons, how much will the company report on the balance sheet as “Cash and Cash Equivalents”?
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Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 20%. The Federal Reserve buys a government bond worth $750,000 from Lorenzo, a customer of First Main Street Bank. He deposits the money into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street Bank's balance sheet (before the bank makes any new loans). Assets Liabilities Complete the following table to show the effects of the new deposit on excess and required reserves, assuming a required reserve ratio of 20%. Hint: If the change is negative, be sure to enter the value as a negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) (Dollars) 750,000 Now, suppose First Main Street Bank loans out all of its new excess reserves to Juanita, who immediately…
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A new bank has vault cash of $2 million and $6 million in deposits held at its Federal Reserve District Bank.If the required reserves ratio is 9 percent, what dollar amount of deposits can the bank have?
Beleaguered State Bank (BSB) holds $200,000,000 in deposits and maintains a reserve ratio of 10%, which also is the reserve requirement. On paper, write the T account for BSB and use it to answer the rest of this question. Now suppose that BSB's largest depositor withdraws $10,000,000 from her account one day. On paper, show the effect of this on the T account. How many dollars of cash reserves does BSB need to raise to be allowed to open for business the next morning?
On July 31, 2022, Carla Vista Co. had a cash balance per books of $6,335.00. The statement from Dakota State Bank on that date showed a balance of $7,885.80. A comparison of the bank statement with the Cash account revealed the following facts. 1. The bank service charge for July was $19.00. 2. The bank collected $1,715.00 from a customer for Carla Vista Co. through electronic funds transfer. 3. The July 31 receipts of $1,394.30 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31. 4. Company check No. 2480 issued to L. Taylor, a creditor, for $374.00 that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for $347.00. 5. Checks outstanding on July 31 totaled $2,046.10. 6. On July 31, the bank statement showed an NSF charge of $770.00 for a check received by the company from W. Krueger, a customer, on account.…
The Central Bank requires banks to maintain a 10% legal minimum reserve requirement of their deposits. Bank A with total deposits of $100 million isfully loaned up. This means that Bank A has excess reserves of A. 0 B. $10 million C. $1,000 million
Epsilon Corporation has unadjusted cash in bank balances of P1,000,000 and P900,000 at the beginning and end of the month, respectively. Book debits totaled P1,800,000. An analysis with recent bank statements showed deposits in transit of P350,000 at the start of the month, deposits in transit of P220,000 at the end of the month, outstanding checks of P80,000 at the beginning of the month, and outstanding checks of P70,000 at the end of the month. Credit memos were P200,000 last month while it is P50,000 for this month. Bank service charge totaled P30,000 last month. A P120,000 customer check deposited this month was returned by the bank due to insufficient fund. How much is the unadjusted total bank credit for the month?

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