The bank you own has the following balance sheetAssetsOA. You can go to the discount window.OB. You can call in or sell off loans.OC. You can borrow reserves in the federal funds marketOD. Any of the above are appropriate actions to takeLiabilities$75 millionReservesLoansDepositsBank capital$525 millionIf the bank suffers a deposit outflow of $50 million with a required reserve ratio on deposits of 10%, what actions can you take to keep your bank from failing?$500 million$100 million

The Federal Reserve:It has the responsibility to manage the activities of commercial and financial…

The bank you own has the following balance sheet Reserves Loans Assets OA. You can go to the discount window OB. You can call in or sell off loans OC. You can borrow reserves in the federal funds market OD. Any of the above are appropriate actions to take. Liabilities $75 million Deposits Bank capital $525 million If the bank suffers a deposit outflow of $50 million with a required reserve ratio on deposits of 10%, what actions can you take to keep your bank from failing? $500 million $100 million

The bank you own has the following balance sheet Reserves Loans Assets OA. You can go to the discount window OB. You can call in or sell off loans OC. You can borrow reserves in the federal funds market OD. Any of the above are appropriate actions to take. Liabilities $75 million Deposits Bank capital $525 million If the bank suffers a deposit outflow of $50 million with a required reserve ratio on deposits of 10%, what actions can you take to keep your bank from failing? $500 million $100 million

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter25: Money, Banking, And The Federal Reserve System

Section: Chapter Questions

Problem 4P

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Similar questions

Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 32Deposits 205Loans 150 Securities 53Other $X Using the balance sheet above, find the level of required reserves for this bank if the required reserve ratio = 8%(Give answers to 2 decimal places as needed)
Your bank has the following balance sheet: Assets Liabilities Checkable Reserves $90 million $380 million deposits $130 Securities million Loans $200 million Bank capital $40 million If the required reserve ratio is 20%, what will be the size of this bank (as measured by its total assets or liabilities) after $20 million deposit outflow if it just meets reserve deficiency by taking out a discount loan from the Federal Reserve? $402 million $400 million. OOOO $420 million. $412 million.
1. You deposit $100 of currency into your account. Explain what happens to reserves , checkabledeposits, and monetary base? 2. Explain what the shadow banking system is and how it works. 3. Your bank has the following balance sheet:Assets LiabilitiesReserves $70 million Checkable deposits $200 millionSecurities $50 millionLoans $130 million Bank capital $50 millionIf the required reserve ratio is 10%, what actions should the bank manager take if there is anunexpected deposit outflow of $50 million? Explain your answer. 4. Explain and demonstrate graphically that if the central bank pursues targeting a monetaryaggregate, it is likely to lose control over the interest rate. 5. In the market for reserves, the federal funds rate is equal to the interest rate paid on excessreserves. Explain and demonstrate graphically the effect of an open market sale on the federalfunds rate.
4) Smart Financial starts its first day of operations with $15 million in capital. A total of $130 million in checkable deposits is received. The bank makes a $25 million commercial loan and another $50 illion in mortgages with the following terms: 200 Page 1 of 2 standar 30-year, fixed rate mortgages with a nominal annual rate of 5.25%, each for $250,000. Assume that required reserves are 11%. a. What does the bank balance sheet look like? b. How well capitalized is the bank? Show the calculation. c. Calculate the risk-weighted assets and risk-weighted capital ratio after Smart Financial's first day.
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
Your uncle repays a $100 loan from Tenth NationalBank (TNB) by writing a $100 check from his TNBchecking account. Use T-accounts to show the effectof this transaction on your uncle and on TNB. Hasyour uncle’s wealth changed? Explain.
assume the required Reserve ratio is 12 for scientific Commercial Bank has actual reserves of 15,000 loans of 85,000 and checkable deposits of 80,000 what is required reserves a 5,400 B 9600 C 15,000 D 80,000
O clpccd.instructure.com SA Quiz: 18.10 Final Exam (. E Report - Google Docs m morena M Inbox (18,303) - randyth.. Research Paper Table 1 Balance Sheet of the First National Bank Assets Liabilities ments Reserves $ 3,275 Deposit $16,500 ns nts Loans $13,225 utóring Total Assets $16,500 Total Liabilities $16,500 Refer to Table 1. Assume that this is the balance sheet of the First National Bank, If the Federal Reserves decreases the reserve requirement from 9% to 5%. This bank's excess reserves will change by: O $660 $1,790 O $2,450 $330 O $495 80 F2 DII DD F3 F4 F5 F6 F7 F8 F9 @ #
What are the benefits and costs for a bank when itdecides to increase the amount of its bank capital?
Consider the following balance sheet of Berjaya Bank. The required reserve ratio on demand deposits is 8%. Berjaya Bank Aset / Assets (million $) Rizab / Reserves Pinjaman / Loans Sekuriti / Securities Liabiliti / Liabilities (million $) Deposit semasa Demand deposits Modal bank / Net Worth 30 290 150 140 30 1. Calculate the bank's excess reserves 2. Suppose Berjaya Bank sells $40 million of its securities to the central bank. Show the balance sheet of Berjaya Bank after this transaction
Assume we have a simplified banking system inbalance-sheet equilibrium. Also assume that allbanks are subject to a uniform 10 percent reserverequirement and demand deposits are the onlyform of money. A commercial bank receiving anew demand deposit of $100 would be able toextend new loans in the amount ofa. $10.b. $90.c. $100.d. $1,000.
You take $100 you had kept under your mattressand deposit it in your bank account. If this $100stays in the banking system as reserves and if bankshold reserves equal to 10 percent of deposits, byhow much does the total amount of deposits in thebanking system increase? By how much does themoney supply increase?