QUESTION $1$: $13$ Marks

Part $1$: $4$ Marks:

Consider a bank with the following information $($in table $1,$ table $2)$

Balance sheet:

$\backslash$table$[[$Assets$,$Liabilities,$],[$Total Reserves,,Deposits,$8000],[$Required Reserves,,Bank Capital,$5000],[$Excess Reserves,$1855\mathrm{.}6Bi,$Borrowings,$],[$Securities$,,,],[$Loans$,,,],[$Other assets,,,$],[$Total assets,,Total Liabilities,$\backslash$table$[[$$$14,422\mathrm{.}6],[$Bil$.]]]]$

$\backslash$table$[[,$Amounts in $Bil.$],[$Investment Loans,$1686\mathrm{.}4],[$Real Estate Loans,$3563\mathrm{.}6],[$Consumer Loans,$1157\mathrm{.}5],[$Interbank Loans,$110\mathrm{.}7],[$Other Loans,$1165\mathrm{.}8],[$Other assets,$1,113\mathrm{.}8$