Your bank has the following balance sheet: Assets                                     Liabilities                     Reserves $50 million           Checkable deposits     $200 million Securities $50 million           Loans       $150 million           Bank capital                  $50 million If we assume that the required reserve ratio is 10%, please provide a detailed write-up of what actions could (should) the bank manager take if there is an unexpected deposit outflow of $50 million?  Please rank the feasible courses of action from the most desired to least desired and thoroughly explain the reasoning behind your ranking system

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Your bank has the following balance sheet:

Assets                                     Liabilities                    

Reserves $50 million           Checkable deposits     $200 million

Securities $50 million          

Loans       $150 million           Bank capital                  $50 million

If we assume that the required reserve ratio is 10%, please provide a detailed write-up of what actions could (should) the bank manager take if there is an unexpected deposit outflow of $50 million? 

Please rank the feasible courses of action from the most desired to least desired and thoroughly explain the reasoning behind your ranking system

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