Suppose you deposit $100 in a bank, which of the following will occur A The bank's assets will increase by $100 B The bank's liabilities will increase by $200 C The bank's liabilities will decrease by $100 D The bank's reserves will increase by $200

In the example below, we will use year-end assets. Bank A receives $70 in deposits at 5% and, together with 40 in equity, makes a loan of $90 at 7%. The remaining of assets is G-Bond. We will ignore taxes for the moment. Bank A Cash Reserves for Deposit  ? Loan 7%                              $90 G-Bond   5%                             ? Deposits    5%                             $70 Equity                                           $40 Total Assets                       $? Total Equity and Deposit        $110  If Cash Reserves for deposit is at least 8% of the deposit under the Basel Accord, how much of the G-Bond Bank A should purchase?         $17       $14       $16       $18       $20       $15       $19       $21

The T-account below represents assets and liabilities for a bank. Use the T-account to calculate the bank's loans Loans Bonds Reserves Provide your answer below: million Assets ? $18 million $5 million Liabilities + Net Worth Deposits Net Worth $12 million $13 million

Assume that banks holds no excess reserves and the public holds no currency: A. If a bank receives a deposit inflow of $100,000 explain (using t-accounts) what happens to this bank and one additional round in the deposit creation process assuming the reserve requirement is 8%. B. How much do deposits and loans change for the banking system when the process is completed? Show computation and the entire banking system's final T-account. C. Suppose the Central Bank sells $5 billion to ABC Bank. Determine what happens to checkable deposits of the entire banking system after the sale and completion of the multiple deposit creation process. Determine the change in checkable deposit in the banking system and show the T-account of the banking system.

Phil Frugal has been saving his pennies since he was 5 years old. He is now 45 and deposits his savings in a bank. His pennies total $5,000. Using this information and your knowledge of the banking system, select the best match for each item. Then calculate the values of reserves, required reserves, and excess reserves. Assume a required reserve ratio of 10%.  Answer parts a. & b.  a. The amount of reserves the bank owes to other banks: (Choose one of the 4 options) : required reserves, excess reserves, reserves or none of these The maximum amount of reserves available for loans: required reserves, excess reserves, reserves or none of these The amount of reserves the bank must set aside to loan to member banks: required reserves, excess reserves,reserves or none of these b. Enter the values of reserves, excess reserves, and required reserves. Reserves: $     Excess reserves: $     Required reserves: $

Suppose the Royal Bank of Pullman has the following​ assets: cash​ = 100​ (with modified duration of​ 0) and a​ 10-year loan worth​ $900 (with modified duration of​ 9). Its liabilities are a CD worth​ $800 (with a modified duration of​ 2). If interest rates rise by​ 1% the​ bank's equity will fall by​ ________ ​ %. A. 9 B. 5.6 C. 2 D. 6.5

Which of the following statements are most likely to be false? 1. The effective annual interest rate will always be greater than the quoted (or annual percentage) interest rate. II. All else being the same, the present value of a five-year, $10,000 annuity due will be higher than the present value of a five-year, $10,000 ordinary annuity. III. If you were depositing funds at a bank, and the quoted interest rate was 4% p.a., you would be better off if the bank used semi-annual compounding rather than quarterly compounding. I and II only. I and III only. II and III only. I, II and III.

A new bank has vault cash of $2 million and $6 million in deposits held at its Federal Reserve District Bank.If the required reserves ratio is 9 percent, what dollar amount of deposits can the bank have?

You wish to invest ₱10,000 for a period of 5 years. Which of the following investments would be best for you? Defend your answer in choosing the bank with the best investment by creating a report showing the comparison of each bank.Bank A: 3.75% simple interest rateBank B: 3.25% compounded annuallyBank C: 3.25% compounded quarterlyBank D: 3.25% compounded monthlyBank E: 3.15% compounded daily

We have the following information about a bank's balance sheet. Rate sensitive assets = $10,000,000 Fixed-rate assets = $20,000,000 Rate sensitive liabilities = $4,000,000 Fixed-rate liabilities = $26,000,000 Let's do a simple gap analysis. If the interest rate falls by 5 percent, O a. The bank will lose $300,000. O b. The bank will lose $500,000. O c. The bank will lose $200,000. O d. The bank will gain $300,000. O e. The bank will gain $200,000.