The balance sheet below represents the current financial situation of a commercial bank named Novatia Bank. Suppose that a 15-year-old takes the $150 cash that she received for her birthday and deposits it in her checking account at Novatia Bank. Assets What will happen to the bank's liabilities after the $150 deposit. Cash: $650 Stock Shares: $950 Property: $1050 Checkable Deposits: $750 Balance Sheet Deposits increase cash assets, so they do not affect the liabilities side of a bank's balance sheet. The value of checkable deposits will decrease by $150. The value of checkable deposits will increase by $150. The value of stock shares will decrease by $150. Liabilites The value of stock shares will increase by $150. What will happen to the bank's assets after the $150 deposit? The value of propery holdings will decrease by $150. The value of cash holdings will increase by $150. The value of cash holdings will decrease by $150. Since deposits are a liability, there is no change to the asset side of the bank's balance sheet. The value of propery holdings will increase by $150.

The balance sheet below represents the current financial situation of a commercial bank named Novatia Bank. Suppose that a 15-year-old takes the $150 cash that she received for her birthday and deposits it in her checking account at Novatia Bank. Assets What will happen to the bank's liabilities after the $150 deposit. Cash: $650 Stock Shares: $950 Property: $1050 Checkable Deposits: $750 Balance Sheet Deposits increase cash assets, so they do not affect the liabilities side of a bank's balance sheet. The value of checkable deposits will decrease by $150. The value of checkable deposits will increase by $150. The value of stock shares will decrease by $150. Liabilites The value of stock shares will increase by $150. What will happen to the bank's assets after the $150 deposit? The value of propery holdings will decrease by $150. The value of cash holdings will increase by $150. The value of cash holdings will decrease by $150. Since deposits are a liability, there is no change to the asset side of the bank's balance sheet. The value of propery holdings will increase by $150.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: The table below lists the assets and liabilities for 3 banks. Bank Assets Liabilities Boomtown Bank…

A: Net worth is the bank's assets minus the bank's liabilities. i.e., Net worth = Bank's asset -…

Q: P = 21 + 3k? %3D Find the marginal productivity with respect to capital for 4 units c labor and 3…

A: To calculate marginal-productivity of labor we find the partial derivative of P with respect to L.…

Q: The balance sheet of Key Bank (KB) has the following items (all amounts are in SMM). On the Assets…

A: The repricing gap is a measure used in asset-liability management to calculate the gap between the…

Q: First National Bank has liabilities of $1 million and net worth of $100,000. First National Bank's…

A: Given:- Liabilities=$1 million Net worth=$100,000 To calculate:- National bank asset=? Please find…

Q: Fill in the blanks in the balance sheet of the Flames Bank in the table below. Assume that the value…

A: The required reserve ratio will be computed by dividing an amount of money a bank will be required…

Q: not use ai please

A: When a company like Amazon repurchases shares at the market price, it essentially buys back some of…

Q: 1. The bank's assets are $1M of cash, $50M of commercial loans, $9M of Treasury bonds, and $100M of…

A: Total Assets = $1M + $50M + $9M + $100M + $140M + $10M = $310M

Q: please answer in text form and in proper format answer with must explanation , calculation for each…

A: Transaction 1: Selling $150 of foreign assets for domestic currency.Decrease in foreign assets by…

Q: Identify two of the money market instruments that are commonly used by Commercial Banks. For each…

A: Money market instrument- These are short-term financing tools used for increasing the financial…

Q: Suppose X Corp. issued one-year discount bonds with a face value of $5,000 and the bonds were sold…

A: Given : Issued bonds =$5000 Sold Bonds=$4800

Q: When selecting a financial institution, you should consider: (select all that apply) convenience,…

A: Financial Institution is an institution such as central banks, commercial Banks, credit unions etc.…

Q: Assuming that the average duration of First National Bank's $100 million assets is five years, while…

A: Given; Assets value=$100 millionLiabilities value=$80 millionInterest rates decreases by 5%Change in…

Q: The required reserve ratio is 25% for all banks. Second National Bank is capable of loaning $ (Do…

A: Net worth is positively related to reserves. It means as reserves rise then net worth fall and as…

Q: Assets Liabilities and Net Worth Reserves $27,000 Checkable Deposits $110,000 Loans 50,000 Stock…

A: Assets Liabilities and Net Worth Reserves $27,000 Checkable Deposits $110,000 Loans 50,000 Stock…

Q: Task 2: Suppose Melvin's Bank starts with the balance sheet in Table 9.4A and the income statement…

A: The balance sheet lists a company's assets, liabilities, and long-term investments. Investors…

Q: Which of the following assets in the U.S. would be considered the least liquid? A silver coin An…

A: Liquid assets are those which are encashable in less time which varies from absolute liquid to…

Q: Use the information given in North Central National Bank's balance sheet to answer the following…

A: The reserve is the percentage of money that the commercial banks have to keep with them without…

Q: rst national bank has assets of $900,000 and liabilities of $600,000. First National Trust’s…

A: Asset = 900,000 Liability = 600,000

Q: Which of the following statements is true? Question 30 options: a) A bank’s balance sheet…

A: A bank is an entity that acts as the financial intermediatary to provide loans to the investors and…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: Detailed explanation: Problem Statement: Jill makes a $362 purchase at Canadian Tire using a debit…

Q: If value of output is $310 million and sales is $270 million Find the change in stock

A: The data presented in the question is as follows:- Value of output = $310 million Sales = $270…

Q: The table below shows the expected rate of return and the demand for ovens. Ovens Expected Rate…

A: The problem is asking us to determine the number of ovens that will be demanded given the expected…

Q: Some bank has assets totaling $1B. This bank has $25M in capital, and earned $10M last year. What is…

A: The calculation of bank’s earnings-to-capital ratio is shown below.

Q: Reserves $ 100 Checkable Deposits 1,000 Loans (to customers) 300 Property Securities (owned) Stock…

Q: Assume a bank has $200 million of assets with a duration of 2.5, and $190 million of liabilities…

A: Banking institutions stimulate monetary activity by offering services such as deposits and loans,…

Question

The balance sheet below represents the current financial situation of a commercial bank named Novatia Bank.
Suppose that a 15-year-old takes the $150 cash that she received for her birthday and deposits it in her checking
account at Novatia Bank.
Assets
Cash: $650
Property: $1050
What will happen to the bank's liabilities
after the $150 deposit.
Balance Sheet
Deposits increase cash assets, so they
do not affect the liabilities side of a
bank's balance sheet.
The value of checkable deposits will
decrease by $150.
The value of checkable deposits will
increase by $150.
The value of stock shares will decrease
by $150.
The value of stock shares will increase
by $150.
Liabilites
Stock Shares: $950
Checkable Deposits: $750
What will happen to the bank's assets after
the $150 deposit?
The value of propery holdings will
decrease by $150.
The value of cash holdings will increase
by $150.
The value of cash holdings will decrease
by $150.
Since deposits are a liability, there is no
change to the asset side of the bank's
balance sheet.
The value of propery holdings will
increase by $150.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Define Assets, Liabilities and Balance Sheet:

VIEW

Step 2: Change in Liabilities side:

VIEW

Step 3: Change in Assets side:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Your uncle repays a $200 loan from Tenth National Bank (TNB) by writing a $200 check from his TNB checking account. Assume these funds are the only loans and deposits available for your uncle and the bank. Complete the following T-accounts for your uncle and TNB before your uncle repays the loan. Complete the following T-accounts for your uncle and TNB after your uncle repays the loan. Your Uncle Assets Liabilities Tenth National Bank Assets Liabilities Complete the following T-accounts for your uncle and TNB after your uncle repays the loan. Your Uncle Assets Liabilities Tenth National Bank Assets Liabilities True or False: Your uncle's wealth has changed. True False
Consider the relative liquidity of the following assets: Assets 1. A bond issued by a publicly traded company 2. The funds in a savings account 3. A $1 bill 4. Your condo Select the assets in order of their liquidity, from most liquid to least liquid. Most Liquid Second-Most Liquid Third-Most Liquid Least Liquid Asset
In three sentences or less, describe the difference between an illiquid commercial bank and an insolvent commercial bank.
22. Which of the following entries would appear on the liabilities side of a commercial bank's balance sheet? Government of Canada securities demand deposits cash reserves mortgage loans foreign currency reserves
The young and beautiful expert Hand written solution is not allowed
8
Economics
You are getting married and are unhappy with your present bank. Discuss how you should go about choosing a new bank and opening an account. Consider the factors that are important to you in selecting a bank – such as the type and ownership of accounts (individual or joint) and bank fees and charges, among others.
Suppose the following items were taken from the December 31, 2018, assets section of the Warren Company balance sheet. (All dollars are in millions.) Instructions Prepare the assets section of a classified balance sheet, listing the current assets in order of their liquidity. Inventory $17,000 Patents $12,500 Notes receivable—due after December 31, 2019 5,500 Buildings 21,600 Notes receivable—due before December 31, 2019 400 Cash 9,200 Accumulated depreciation—buildings 12,800 Accounts receivable 5,800 Debt investments (short-term) 2,008
Not sure how to solve
The following financial statement is for the current year. From the past, you know that 10% of fixed-rate mortgages prepay each year. You also estimate that 10% of checkable deposits and 20% of savings accounts are rate sensitive. Second National Bank Assets Liabilities Reserves $ 1,500,000 Checkable Deposits $ 15,000,000 Securities Money Market Deposits $ 5,500,000  1 Year $ 6,000,000 Savings Accounts $ 8,000,000 1 to 2 Years $ 8,000,000 CDs  2 years $ 12,000,000 Variables-rate $ 15,000,000 Residential Mortgages  1 Year $ 22,000,000 Variables-rate $ 7,000,000 1 to 2 Years $ 5,000,000 Fixed-rate $ 13,000,000  2 years $ 2,500,000 Commercial Loans Fed Funds $ 5,000,000  1 Year $ 1,500,000 Borrowings 1 to 2 Years $ 18,500,000  1 Year $ 12,000,000  2 years $ 30,000,000 1 to 2 Years $ 3,000,000 Buildings, etc. $ 2,500,000  2 years $ 2,000,000 Bank Capital $ 5,000,000 Total $100,000,000 Total $100,000,000 (a) What is the current Income GAP for Second National Bank? (b) What will…
None