Woylie Bank has the following balance sheet: Assets Cash 21,000 Short-term Securities 369,000 400,000 790,000 Loans Total Liabilities and Equity Demand Deposits Fed Funds Borrowed Equity Total Select one: O a. Run down the $20,000 cash. 550,000 151,000 89,000 790,000 Assume the bank is required to hold a minimum reserve of 2% of the demand deposits, what is (are) the possible way(s) that the bank can meet an expected net deposit drain of $20,000 using stored liquidity management techniques? O b. Run down $10,000 cash and sell some short-term securities to raise $10,000 cash. O c. Liquidate some loans to raise $20,000 cash. Od Sell some short-term securities to raise $20.000 cash

Woylie Bank has the following balance sheet: Assets Cash 21,000 Short-term Securities 369,000 400,000 790,000 Loans Total Liabilities and Equity Demand Deposits Fed Funds Borrowed Equity Total Select one: O a. Run down the $20,000 cash. 550,000 151,000 89,000 790,000 Assume the bank is required to hold a minimum reserve of 2% of the demand deposits, what is (are) the possible way(s) that the bank can meet an expected net deposit drain of $20,000 using stored liquidity management techniques? O b. Run down $10,000 cash and sell some short-term securities to raise $10,000 cash. O c. Liquidate some loans to raise $20,000 cash. Od Sell some short-term securities to raise $20.000 cash

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If Bank A's total reserves are $10.8 million, its excess reserves are $4.60 million, and the required reserve ratio is 4%, then Bank A's required reserves equal and its total deposits equal $6.2 million; $105 million $6.6 million; $165 million O $6.6 million; $270 million O $6.1 million; $122 million $6.2 million; $155 million
When the first deposit deposited in the bank is 250,000 TL and the required reserve ratio determined by the central bank is 10%, how much is the total loan volume created? a. 1.000.000 b. 2.250.000 C. 2.500.000 d. 25.000.000 e. 750.000
18. Refer to Table 13.2. The required reserve ratio is 20%. If the First Charter Bank ismeeting its reserve requirement and has no excess reserves, its loans equal:a) $710b) $460c) $550d) $760
24. Assuming the required reserve ratio is 10%, how much can this bank lend? a) $200,000 b) $300,000 c) $400,000 d) $550,000 e) $3,000,000
AB ans
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What is the role of a commercial bank? O a. To create money through the banking system O b. To maximize profits for its shareholders O c. To take customers' deposits and make loans O d. All of the answers are correct
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4. Working through an open-market operation Assume that the following balance sheet portrays the state of the banking system. The banks currently have no excess reserves. Assets (Billions of Dollars) Total reserves 5 Checkable deposits 25 20 50 Loans Securities Total O What is the required reserve ratio? 40% 25% Liabilities and Net Worth 5% 10% Total 50 50
Note. Don't use Ai bot
4. Working through an open-market operation Assume that the following balance sheet portrays the state of the banking system. The banks currently have no excess reserves. Assets Liabilities and Net Worth (Billions of Dollars) Total reserves 5 Checkable deposits 50 Loans 25 Securities 20 Total 50 Total 50 What is the required reserve ratio? 10% O 40% O 5% 25%
Northern Bank: Balance Sheet Assets Liabilities Deposits Capital $7,000 $1,000 $8,000 Reserves $420 $7,580 $8.000 Loans Refer to the table above. Assume that Northern Bank's target reserve ratio is 8 percent. In order to achieve its target reserve ratio, Northern Bank must and O A. increase its reserves by $140; decrease its deposits by $140 O B. increase its reserves by $280; increase its loans by $380 OC. increase its reserves by $280; decrease its deposits by $280 O D. increase its reserves by $140; decrease its loans by $140 O E. not change its reserves; not change its deposits