$9.$ Bank leverage

Use the information given in Upper Midwest National Bank's balance sheet to answer the following questions.

Bank's Balance Sheet

Assets Liabilities and Owners' Equity

Reserves $$175$ Deposits $$1,400$

Loans $$700$ Debt $$225$

Securities $$875$ Capital $($owners$\text{'}$ equity$)$ $$125$

Suppose the owners of the bank contribute an additional $$200$ from their own funds and use it to buy securities in the name of the bank. This would increase the securities account and the account.

This would also bring the leverage ratio from its initial value of to a new value of $.$