Bank A Balance Sheet Assets Liabilities. Reserves 1,000 Deposits 9,500 Loans 8,000 Capital 500 Securities 1,000...
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Bank A Balance Sheet Assets Liabilities. Reserves 1,000 Deposits 9,500 Loans 8,000 Capital 500 Securities 1,000 Bank B Balance Sheet Assets Reserves 1,000 Loans 8,000 Securities 1,000 Liabilities. Deposits 9,000 Capital 1,000 a. Which bank is riskier? Why? b. Suppose the Federal Reserve purchases $500 of securities from Bank A. What other item on the balance sheet would change, and by how much? c. Suppose some borrowers default on their loans to Bank B and the value of Bank B's loans fall to $7,500. What other item on the balance sheet would change and by how much? d. Which of the accounting items on the bank's balance sheet includes the bank's vault cash? Bank A Balance Sheet Assets Liabilities. Reserves 1,000 Deposits 9,500 Loans 8,000 Capital 500 Securities 1,000 Bank B Balance Sheet Assets Reserves 1,000 Loans 8,000 Securities 1,000 Liabilities. Deposits 9,000 Capital 1,000 a. Which bank is riskier? Why? b. Suppose the Federal Reserve purchases $500 of securities from Bank A. What other item on the balance sheet would change, and by how much? c. Suppose some borrowers default on their loans to Bank B and the value of Bank B's loans fall to $7,500. What other item on the balance sheet would change and by how much? d. Which of the accounting items on the bank's balance sheet includes the bank's vault cash?
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a Bank B is riskier compared to Bank A This assessment is based on the capital adequacy ratio which ... View the full answer
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