Suppose a bank receives a deposit of... Provide answer the financial accounting Suppose a bank receives a deposit of $10,000. It holds$2,500 as reserves and lends out the remaining $7,500.What is the reserve ratio?

The percentage of a bank's total deposits that are held as reserves is known as the reserve ratio.…

Answered: Suppose a bank receives a deposit of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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General Accounting
Assume that a bank receives a deposit of $1,000 in cash, puts aside $200 as required reserves, and makes a loan of $800, these transactions imply that: the money multiplier is 10. the money multiplier is 5. the money multiplier is 4. the money multiplier is 2. the money multiplier is 2.
Construct a bank balance sheet with the following items : reserves , deposits , loans , securities , capital , and debt . Choose values so that the reserve -deposit ratio is 10 percent and the leverage ratio is 10. Give an example of a change in asset values that would push bank capital to zero . What happens when bank capital is gone ?
A bank's required reserve ratio is equal to: Checkable Deposits/Required Reserves Net Worth/Assets Loans/Checkable Deposits Required Reserves/Checkable Deposits give answer with explanation
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Imagine that the banking system's balance sheet can be represented by the following t-account: Assets LIABILITIES AND NET WORTH RESERVES 200 DEPOSITS 2000 BONDS 800 LOANS 1000 NETWORTH 0 TOTAL 2000 TOTAL 2000 Assuming the bank is "loaned up" the required reserve ratio is ___________ (round to two decimal places) The money multiplier is ___________ Imagine that the central bank uses open market operations to buy $300 worth of bonds from the bank above. Fill in the following t-account assuming that the money multiplier has taken its full effect: ASSETS LIABILITIES AND NET WORTH RESERVES __?___ DEPOSITS ___?__ BONDS ____?___ LOANS ____?____ NET WORTH ___?___ TOTAL _____?______ TOTAL ___?___
If a bank has $200,000 of checkable deposits, a required reserve ratio of 20 percent, and it holds $80,000 in reserves, then the maximum deposit outflow it can sustain without altering its balance sheet is A) $50,000. B) $40,000. C) $30,000. D) $25,000. Answer: A How to solve it?
The financial statements for MHM Bank (MHM) are shown below: Calculate the dollar value of MHM’s earning assets. Calculate the dollar value of MHM’s interest-bearing liabilities. Calculate MHM’s spread. Calculate MHM’s interest expense ratio.
Answer the following questions regarding the balance sheet given below. Assume £1 = $1.40. a) Is this bank net short or net long? b) What is the net interest income (NII) if the value of the £ appreciates to $1.65? c) What is the net interest margin (NIM) if the value of the £ depreciates to $1.15? Liabilities and Equity $800M in USD $200M in GBP Assets $300M in USD $700M in GBP Country US UK Deposit Rate 6% 8% Lending Rate 7% 9%
Interest on your bank balance: Suppose your bank account has a balance todayof $100. Consider the following time periods: t = 0, t = 1, t = 2, t = 12,t = 24, t = 48, and t = 60. Assume there are no deposits or withdrawalsin this account other than the interest that accumulates. (If you like, use aspreadsheet program to help you with this question.)(a) Compute your bank balance for these time periods assuming the interestrate is 1%.(b) Do the same thing for an interest rate of 6%.(c) Plot your bank balances for these two scenarios on a standard scale.(d) Do the same thing with a ratio scale.
A bank has a net income after taxes of $4 million, assets of $200 million, and bank capital of $10 million. What is the bank's return on assets (ROA)? Write your answer as a percent rate.
7. Your checkbook shows you have a $10,000 balance in your account. You write checks totaling $4,000 and make a deposit of $6,000. What is your disbursement float? 8. Your checkbook shows you have $10,000 balance in your account. You write checks totaling $4,000 and make a deposit of $6000 What is your collection float?

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Suppose a bank receives a deposit of $10,000. It holds $2,500 as reserves and lends out the remaining $7,500. What is the reserve ratio?