Assume the Continental National Bank's balance statement is as follows:Assets:reserves $40,000loans $25,000securities $110,000Liabilities + net worthcheckable deposits $130,000stock shares $45,000Assuming a legal reserve ratio of 20 percent, how much in excess reserves would this bank have after a check for $10,000 was drawn and cleared against it?$3,000.$24,000.$6,000.$16,000.

Table 14.1: FIRST COMMERCIAL BANK Asset Liabilities Total Reserves: $150,000 $100,000 $1,000,000 $200,000 Deposits Net Worth Required Reserves Excess Reserves ? ? Loans $1,200,000 Total $1,200,000 Total 13. Refer to Table 13. 1. First Commercial bank's excess reserves equal $ a) 150,000 b) 250,000 c) 100,000 d) 50,000

XYZ Corporation is trying to decide whether it should buy money market instruments or leave its funds on deposit at a commercial bank. Which of the following is an advantage of buying money market instruments over leaving funds on deposit at a commercial bank that XYZ should be aware of?   a.  ​Money market instruments offer a higher yield than leaving funds on deposit at a commercial bank.   b.  ​Money market instruments are more liquid than funds on deposit at a commercial bank.   c.  ​Money market instruments are safer than leaving funds on deposit at a commercial bank.   d.  ​Money market instruments involve a financial middleman.

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Suppose that a bank holds  $15m in treasury bonds  $10m in reserves  $30m of checkable deposits  $20m of time deposits  $6m of capital  How much loan does the bank have if we know it doesn't have any other assets or liabilities  Suppose that checkable deposits and reserves pay 0 interest  The interest rate on treasuries is 3% The loan pays 7% Time deposits pay 5% How much profit does the bank make? What is the bank's return on assets? 3.2% 2.9% 3.7% 2.6%

4. Working through an open-market operation Assume that the following balance sheet portrays the state of the banking system. The banks currently have no excess reserves. Assets Liabilities and Net Worth (Billions of Dollars) Total reserves 5 Checkable deposits 50 Loans 25 Securities 20 Total 50 Total 50 What is the required reserve ratio? 10% O 40% O 5% 25%

7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10%. Hubert, a client of First Main Street Bank, deposits $500,000 into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans). Assets Liabilities                       Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 10%. Hint: If the change is negative, be sure to enter the value as negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) (Dollars) 500,000         Now, suppose First Main Street Bank loans out all of its new excess reserves to Eileen, who immediately uses the funds to write a check to Clancy. Clancy…

Bank of Wealth Balance Sheet Assets Liabilities Demand Deposits $250,000 Required reserves $25,000 Excess reserves $10,000 Total Reserves $35,000 Loans $215,000 Total Assets $250,000 Total Liabilities $250,000 - In the above table, the Bank of Wealth is subject to a required reserve ratio of O 20 percent. O 5 percent. ○ 10 percent. ○ 15 percent.

Imagine that Odyssey National is a brand new bank, and that its required reserve ratio is 10 percent. If it accepts a $1,000 deposit, then its excess reserve balance will be: O $0. $100. O $90. O $910. O $900.