Umpqua Bank started its first day of operations with $10 million in capital on September 1, 2020. $180 million in checkable deposits was received. The bank invested in a $80 million commercial loan and $50 million mortgages, with the following term: Mortgages: 250 standard 30-year, fixed-rate with a nominal annual rate of 3.5% each for $200,000. Commercial loan: 5-year loan, simple interest paid monthly at 1.0% per month The bank also purchased $40 million in 30- day T-bills. The T-bills were trading at $990.099 for a $1,000 face value. On September 2, 2020, deposits fell by $5 million. If the required reserve ratio was 10%, what was the bank's shortfall in reserves? $2,500,000 $3,000,000 $5,000,000 $1,000,000

Umpqua Bank started its first day of operations with $10 million in capital on September 1, 2020. $180 million in checkable deposits was received. The bank invested in a $80 million commercial loan and $50 million mortgages, with the following term: Mortgages: 250 standard 30-year, fixed-rate with a nominal annual rate of 3.5% each for $200,000. Commercial loan: 5-year loan, simple interest paid monthly at 1.0% per month The bank also purchased $40 million in 30- day T-bills. The T-bills were trading at $990.099 for a $1,000 face value. On September 2, 2020, deposits fell by $5 million. If the required reserve ratio was 10%, what was the bank's shortfall in reserves? $2,500,000 $3,000,000 $5,000,000 $1,000,000

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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