Question 22pinaverBNP Paribas has 800 depositors. Each depositor deposits $1,000 into the bank at t-0. BNP Paribas offers its depositors an interest rate. NP then uses the deposits to make 2 yearsimple loans at an interest rate of B Depositors of BNP Paribas can either withdraw their deposits at t1 or t-2. At t1, BNP can sell its loans at the initial loan values, if neededAssume that each depositor believes that there are a total of X number of depositors who will withdrew at t. Let k be the cutuff such that if X>. the bark fal and ifXk the benkdoes not fail. What is the value ofk? Round your answer to at least 2 decimal places

An interest rate refers to the amount charged by a lender to a borrower for any form of debt. It is…

BNP Paribas has 800 depositors. Each depositor deposits $1,000 ino the berk ENP Parbas offers s depostors an erestte NP then uses the deposis make 2 year simple loens at an interest rate of . Depositors of BNP Parbas can either withdrantheir deposits at or t2 Act NP sell s loans the inisal loan values, freed Assume thateach depositor believes that there are a total of X number of depositors who will hdrew tLetk be the cufsuch that X>khe bank fails and f X

BNP Paribas has 800 depositors. Each depositor deposits $1,000 ino the berk ENP Parbas offers s depostors an erestte NP then uses the deposis make 2 year simple loens at an interest rate of . Depositors of BNP Parbas can either withdrantheir deposits at or t2 Act NP sell s loans the inisal loan values, freed Assume thateach depositor believes that there are a total of X number of depositors who will hdrew tLetk be the cufsuch that X>khe bank fails and f X

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter14: Banking And The Money Supply

Section: Chapter Questions

Problem 2.2P

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