Question: The table below shows the balance sheet for a hypothetical commercial bank (Vancouver Bank). Assume that the Vancouver Bank has achieved its target reserve ratio.

The table below shows the balance sheet for a hypothetical commercial bank (Vancouver Bank). Assume that the Vancouver Bank has achieved its target reserve ratio.

Balance Sheet:Vancouver Bank

Assets

Liabilities

Reserves

$ 200

Deposits

$ 4000

Loans

$ 4200

Capital

$ 400

a.What is the Vancouver Bank's target reserve ratio?

b.What is the value of the owners' investment in the bank?

c.Suppose someone makes a new deposit to the Vancouver Bank of $100. Draw a new balance sheet showing the immediate effect of the new deposit. What is the Vancouver Bank's new reserve ratio?

Suppose instead that someone withdraws $100 cash from the Vancouver Bank. Show the new balance sheet and the new reserve ratio

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Vancouver Bank Balance Sheet Analysis a Target Reserve Ratio Unfortunatelywe cannot determine the Va... View full answer

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 Accounting Questions!

The table below shows the balance sheet for the Regal Bank, a hypothetical commercial bank. Assume that the Regal Bank has achieved its target reserve ratio. a. What is the Regal Bank's target...

To what extent do mission statements drive decision-making? This is for a risk management in healthcare course

Question 8 ( 6 marks, each question is worth 1 mark) The below table shows balance sheet for a chartered bank. Assume that the bank has achieved its target reserve ratio. Balance Sheet: Regal Bank...

Predicting Genetic disorders in Children based on their Medical information and History Hereditary diseases is becoming more of a problem as human population grows exponentially. Genetic testing...

The Seabuck and Roper Company has a large warehouse in southern California to store its inventory of goods until they are needed by the companys many furniture stores in that area. A single crew with...

Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a five-year bond issued by Venice Corp. that pays an annual coupon of 4.84 percent. If the current market rate is...

What is the biggest strength of the program?

The FCPA has too many exceptions to be an effective deterrent to unethical business practices. Do you agree or disagree with this statement? Explain your answer.

hurons Manufacturing produces a single product identified as PFR. Data Orelating to the coming month are: Sales: estimated at 12 500 units. Selling price will be $95 per unit. Inventories: beginning...

1. The owner of a small software company felt accounting system was useless. He stated 'Accounting systems only generate historical costs. Historical costs are useless in my business because...

What does De Soto mean by "strong, innovative economic markets"? A. These are markets that use existing technology to produce new goods and services. B. These are markets that are profitable for...

Using the Federal Rules of Evidence. What would be a given analysis of this scenario? On an open stretch of a two-lane highway in Nevada Jay Gadsby, traveling eastbound in a red Z -car with racing...

A hedger is short spot and long futures. Today, spot is 4.40 and the June future is 5.00. A bit later, spot goes to 5.00 and the June future goes to 5.10. What has happened to basis in this period?...

The EICAS CRTs (cathode ray tubes) are: Group of answer choices Identical Directly powered from the battery bus Cooled by AC-powered fans All the above Only b and c

A recruiter asks candidates for a customer service rep position, "Why are you interested in this role?" Which response ( s ) would hurt a candidate's chances of advancing to the next round? Select...

Gabana Inc.'s 100 petty cash fund has cash of 4 and receipts of 91. The journal entry to replenish the account would include a. credit to Cash Over and Short for 5. b. credit to petty Cash for 85. C....

As economic conditions change, how do banks adjust their asset portfolio?

25.4. Grady suggests an etiquette for software metrics. Can you add three more rules to those noted in Section 25.1.1?

Example 4.7: The binomial distribution for large N, n Show that for large values of N and n the binomial distribution of Example 4.6 assumes the Gaussian form W(n) = Ne|V2|(nn)2/2, (4.62) and...

25.1. Describe the difference between process and project metrics in your own words.