Suppose the Federal Reserve increases deposits at financial institutions by $50 billion through its open market operations. If the reserve requirement for all deposits is 8%, what is the maximum impact the Fed's actions can have on total deposits? a. $575 billion increase b. $54.3 billion increase c. $625 billion increase d. An increase greater than $1 trillion e. Total deposits would decrease, but there is not enough information to compute the amount.

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Wolfrum Technology (WT) has no debt. Its assets will be worth $467 million one year from now if the economy is strong, but only $295 million in one year if the economy is weak. Both events are equally likely. The market value today of its assets is $291 million. a. What is the expected return of WT stock without leverage? b. Suppose the risk-free interest rate is 5%. If WT borrows $139 million today at this rate and uses the proceeds to pay an immediate cash dividend, what will be the market value of its equity just after the dividend is paid, according to MM? c. What is the expected return of WT stock after the dividend is paid in part (b)? a. The unievered expected return of WT stock is (Round to two decimal places)

Ef 321.

Q5. Consider an economy where the required reserve ratio is 40%. Suppose Mark sells $2,000 worth of government securities to the FED and deposits the proceeds ($2,000) in Bank 1. Note that this new deposit initially increases the quantity of money by $2,000.Assume that all accounts were previously equal to 0 (or that we are only looking at changes. What will be the value of the total deposits in Bank 1.

5. If all banks operate under a full reserve system, how much money is created by the banking system with a Si00 deposit of gold? What would happen under a fractional reserve system where the reserve ratio chosen by all banks was 5%?

According to the quantity theory of​ money, if the longminusrun economic growth rate is​ 3.6%, by how much should the Fed increase the money supply if it wants inflation to be​ 3%?

2. Government Treasury bills are yielding 4.15%. Inflation is 2.75%. What is the real rate of return on this financial asset? A. 6.90% B. 7.01% C. 1.36% D. 1.40%

66. ABC Company has projected the following cash flows: Year 1: 85,000 Year 2: 105,000 Year 3: 109,000 Year 4: 115,000 The analyst has determined an appropriate discount rate is 26% and the long-term growth rate is 2%. What is the terminal value? a. 175,596 b. 190,229 c. 187,096 d. 202,687

Gibson Corporation’s balance sheet indicates that the company has $580,000 invested in operating assets. During the year, Gibson earned operating income of $67,280 on $1,160,000 of sales.  Required Compute Gibson’s profit margin for the year. Compute Gibson’s turnover for the year. Compute Gibson’s return on investment for the year. Recompute Gibson’s ROI under each of the following independent assumptions:(1) Sales increase from $1,160,000 to $1,392,000, thereby resulting in an increase in operating income from $67,280 to $76,560.(2) Sales remain constant, but Gibson reduces expenses, resulting in an increase in operating income from $67,280 to $69,600.(3) Gibson is able to reduce its invested capital from $580,000 to $464,000 without affecting operating income.