Question: A short answer is enough. It is urgently needed. Thank you Question #4 [6 Marks! Use the below balance sheet to answer the following questions

  • A short answer is enough. It is urgently needed. Thank you

A short answer is enough. It is urgently needed. Thank you Question

Question #4 [6 Marks! Use the below balance sheet to answer the following questions Assets Liabilities Rosa rves $300 Deposits $2000 Loans $2200 Capital $500 $2500 $2500 -un.-nn n a} If the Bank extends credit to its customers in the form of household mortgages and lines of credit. Under which category of the balance sheet do these fall? {1 Mark) b] If the owners of The Bank contributed money to start the bank. Under which category of it's balance sheet do these funds fall? {1 Mark) c} What is the current reserve ratio for this bank? {1 Mark] d] If the target reserve is 5%, how much in excess reserves cash is there currently? {1 Mark) e) Assume that the bank is operating at reserve ratio from question "c\" and has no excess reserves. If the Bank receives a new deposit 01 $400, it can immediater expand its loans by how much (1 Mark} f] If instead of issuing loans, the bank kept that $400 from above as reserves, what is the new reserve ratio? {1 Mark) 2 decimal places only

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!