ABC Bank has the balance sheet below. Assume the required reserve ratio is 10%; the excess reserve ratio is 0; and the checkable deposit ratio is also 0. Also assume ABC Bank manages its assets and liabilities to earn the highest possible profit. List 3 different areas ABC Bank will manage to maximize profits and describe how ABC Bank will manage that particular area to maximize profits.

ABC Bank
Assets		Liabilities and Bank Capital
Reserves	$10 million	Checkable Deposits	$100 million
Rate Sensitive Assets	$100 million	Rate Sensitive Liabilities	$50 million
Long-Term Loans	$50 million
Long-Term Securities	$40 million	Bank Capital	$50 million

Answer rating: 100% (QA)

In order to maximize the profits the bank has to do the following aspects 1 Process costs The main r... View the full answer