1. Best Bank has the following balance sheet. Assume that the required reserve ratio is 10%....

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1. Best Bank has the following balance sheet. Assume that the required reserve ratio is 10%. Assets Reserves 31,000 Securities 120,000 Loans 340,000 (i) (ii) (iii) (iv) Liabilities Deposits Borrowing Bank capital 290,000 184,000 Find the amount of bank capital. The bank loses $20,000 on loan defaults. Show the effect on the bank's balance sheet using a T-account. What kind of problem does the bank have after the defaults? Explain different ways the bank can increase its capital-asset ratio to avoid the problem above (BEFORE it gets into this situation). 1. Best Bank has the following balance sheet. Assume that the required reserve ratio is 10%. Assets Reserves 31,000 Securities 120,000 Loans 340,000 (i) (ii) (iii) (iv) Liabilities Deposits Borrowing Bank capital 290,000 184,000 Find the amount of bank capital. The bank loses $20,000 on loan defaults. Show the effect on the bank's balance sheet using a T-account. What kind of problem does the bank have after the defaults? Explain different ways the bank can increase its capital-asset ratio to avoid the problem above (BEFORE it gets into this situation).