In the following bank balance sheet, amounts are in millions of dollars. The required reserve ratio is 4% on the first $30 million of checkable deposits and 10% on any checkable deposits over $30 million. Assets Reserves Loans Liabilities $32.7 Checkable deposits $180.0 $20.0 Securities Total a. Calculate the bank's excess reserves. Excess reserves are $ 16.5 million. (Enter your response rounded to one decimal place.) $150 Net worth $17.3 $200 Total $200 b. Suppose that the bank sells $5 million in securities to get new cash. Show the bank's balance sheet after this transaction. (Enter your responses rounded to one decimal place.) Assets Reserves Loans Securities What are the bank's new excess reserves? Excess reserves are $21.5 million. (Enter your response rounded to one decimal place.) Liabilities $37.7 Checkable deposits $150 Net worth $12.3 $180 $20 c. Suppose that the bank loans all its excess reserves in part (b) to a local business. Show the bank's balance sheet after the loan has been made but before the business has spent the proceeds of the loan. (Enter your responses rounded to one decimal place.) Reserves Loans Securities Assets Liabilities $37.7 Checkable deposits $171.5 Net worth $12.3 Now what are the bank's excess reserves? Excess reserves are $ million. (Enter your response rounded to one decimal place.) $201.5 $20
In the following bank balance sheet, amounts are in millions of dollars. The required reserve ratio is 4% on the first $30 million of checkable deposits and 10% on any checkable deposits over $30 million. Assets Reserves Loans Liabilities $32.7 Checkable deposits $180.0 $20.0 Securities Total a. Calculate the bank's excess reserves. Excess reserves are $ 16.5 million. (Enter your response rounded to one decimal place.) $150 Net worth $17.3 $200 Total $200 b. Suppose that the bank sells $5 million in securities to get new cash. Show the bank's balance sheet after this transaction. (Enter your responses rounded to one decimal place.) Assets Reserves Loans Securities What are the bank's new excess reserves? Excess reserves are $21.5 million. (Enter your response rounded to one decimal place.) Liabilities $37.7 Checkable deposits $150 Net worth $12.3 $180 $20 c. Suppose that the bank loans all its excess reserves in part (b) to a local business. Show the bank's balance sheet after the loan has been made but before the business has spent the proceeds of the loan. (Enter your responses rounded to one decimal place.) Reserves Loans Securities Assets Liabilities $37.7 Checkable deposits $171.5 Net worth $12.3 Now what are the bank's excess reserves? Excess reserves are $ million. (Enter your response rounded to one decimal place.) $201.5 $20
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Transcribed Image Text:In the following bank balance sheet, amounts are in millions of dollars. The required reserve ratio is 4% on the first $30 million of checkable deposits and 10% on any checkable deposits over $30 million.
Assets
Reserves
Loans
Liabilities
$32.7 Checkable deposits
$180.0
$20.0
Securities
Total
a. Calculate the bank's excess reserves.
Excess reserves are $ 16.5 million. (Enter your response rounded to one decimal place.)
$150 Net worth
$17.3
$200 Total
$200
b. Suppose that the bank sells $5 million in securities to get new cash. Show the bank's balance sheet after this transaction. (Enter your responses rounded to one decimal place.)
Assets
Reserves
Loans
Securities
What are the bank's new excess reserves?
Excess reserves are $21.5 million. (Enter your response rounded to one decimal place.)
Liabilities
$37.7 Checkable deposits
$150 Net worth
$12.3
$180
$20
c. Suppose that the bank loans all its excess reserves in part (b) to a local business. Show the bank's balance sheet after the loan has been made but before the business has spent the proceeds of the loan. (Enter your responses
rounded to one decimal place.)
Reserves
Loans
Securities
Assets
Liabilities
$37.7 Checkable deposits
$171.5 Net worth
$12.3
Now what are the bank's excess reserves?
Excess reserves are $ million. (Enter your response rounded to one decimal place.)
$201.5
$20
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