Consider the following simplified balance sheet for a bank: Assets Liabilities $10,000 Deposits $70,000 $66,000 Stockholders' equity $6,000 in excess reserves. Reserves Loans (a) If the required reserve ratio (RR) is 10 percent, this bank currently holds $3,000 $7,000 $10,000
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- A bank has deposits of 400. It holds reserves of 50. It has purchased government bonds worth 70. It has made loans of 500. Set up a T-account balance sheet for the bank, with assets and liabilities, and calculate the banks net worth.Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 44Deposits 255Loans 155 Securities 51Other $X Using the balance sheet above, find the level of excess reserves this bank is holding if the required reserve ratio = 6%(Give answers to 2 decimal places as needed)Reserves $ 100 Checkable Deposits 1,000 300 Loans (to customers) Property Securities (owned) Stock Shares 400 300 100 Refer to the accompanying table of information for the Moolah Bank. Assume that the listed amounts constitute this bank's complete set of accounts. Moolah's assets are $1,100. liabilities are $1,100. net worth is $300. profit is $1,000.
- Assuming that the reserve ratio is 10%, what amount of excess reserves are held by with the bank balance sheet listed below? Assets Liabilities & Net Worth Reserves $280,000 Checking deposits $2,800,000 Loans Outstanding $2,920,000 Total $3,200,000 Net Worth Stockholders' Equity $400,000 Total $3,200,000 a. $240,000 b. zero c. $320,000 d. $280,000Below is the balance sheet for a bank. Under "Other" it has listed "$X" just think of this as the dollar amount needed to make the balance sheet balance. It is not important what that value is for this question. AssetsLiabilitiesReserves 42Deposits 245Loans 160 Securities 48Other $X Using the balance sheet above, find the level of required reserves for this bank if the required reserve ratio = 8%(Give answers to 2 decimal places as needed)Northern Bank: Balance Sheet Assets Liabilities Reserves Loans $780 $15,220 $16,000 Deposits Capital $13,000 $3,000 $16,000 Refer to the table above. Assume that Northern Bank's target reserve ratio is 8 percent. In order to achieve its target reserve ratio, Northern Bank must and ○ A. increase its reserves by $130; decrease its deposits by $130 ○ B. increase its reserves by $260; decrease its loans by $260 ○ C. increase its reserves by $260; decrease its deposits by $260 OD. increase its reserves by $130; increase its loans by $260 ○ E. not change its reserves; not change its deposits
- Use the information given in Upper Midwest National Bank's balance sheet to answer the following questions. Assets Reserves Loans Securities Bank's Balance Sheet $150 $600 Liabilities and Owners' Equity $1,200 Deposits Debt $750 Capital (owners' equity) Suppose a new customer adds $100 to his account at Upper Midwest National Bank, which the owners of the bank then use to make $100 worth of new loans. This would increase the loans account and the account. $200 This would also bring the leverage ratio from its initial value of The riskiness of each asset $100 The total value of liabilities Which of the following do bankers consider when deciding how to allocate their assets? Check all that apply. The size of the monetary base to a new value ofTable 2 First National Bank Assets Liabilities and Owners' Equity Reserves $1,200 Deposits $9,000 Loans $8,000 Debt $800 Short-term securities $800 Capital (owners' equity) $200 Refer to Table 2. The required reserve ratio is 6 percent and First National Bank sells $150 of its short-term securi to the Federal Reserve. This action will increase First National's reserves by S150. Its excess reserves are $240. decrease First National's reserves by $150. Its excess reserves are $0. increase First National's reserves by $150. Its excess reserves increase by $150. increase First National's reserves by $150. Its total reserves increase by $150. both c and d abovePart 2 - Practice- Use the balance sheet for Leon’s Bank below to answer the following questions. Assets Liabilitis Required reserves $1,000 Demand deposits $10,000 Excess reserves $0 Owner’s equity $10,000 Customer loans $8,000 Government securities (bonds) $7,000 Building and fixtures $4,000 1. Calculate the required reserve ratio. Explain how you got your answer. 2. Suppose that an individual deposits $5,000 of cash into her checking account. What is the immediate effect of the cash deposit on the M1 measure of the money supply? Explain. 3. What is the dollar value of the bank’s required reserves after the $5,000 deposit in question #7? Explain. 4. What is the dollar value of the bank’s excess reserves after the $5,000 deposit in question #7? Explain. 5. Calculate the maximum amount that the money supply can change as a result of the $5,000 deposit in question #7. Show your work.
- 8. If a bank has $100,000 of checkable deposits, a required reserve ratio of 20 percent, and it holds $40,000 in reserves, then the maximum deposit outflow it can sustain without altering its balance sheet is A) $30,000. B) $25,000. C) $20,000. D) $10,000.Table 13.2: FIRST CHARTER BANK Assets Reserves $700 $200 $900 Liabilities Deposits Net Worth ? ? Loans ? Total Total 17. Refer to Table 13.2. The required reserve ratio is 20%. If the First Charter Bank is Meeting its reserve requirement and has no excess reserves, its reserve equal: a) $100. b) $150. c) $140. d) $180. 18. Refer to Table 13.2. The required reserve ratio is 20%. If the First Charter Bank is Meeting its reserve requirement and has no excess reserves, its loans equal: a) $710 b) $460 c) $550 d) $760Question 35 If a bank has a required reserve ratio of 25% and there are $5,300,000 in deposits, what is amount of required reserves? $25,000 $280,000 $1,325,000 $2,275,000 $5,005,000
