Table 14.1: FIRST COMMERCIAL BANK Asset Liabilities $150,000 $100,000 Total Reserves: S1,000,000 $200,000 Deposits Net Worth Required Reserves Excess Reserves ? Loans Total $1,200,000 $1,200,000 Total 14. Refer to Table 13.1. First Commercial Bank's total loans equal S_ a) 1,050,000 b) 1.200.000

Question 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

29. For a given return on assets, holding other factors constant,   Question 29 options:   a)  a lower capital-to-asset ratio has no effect on the return on equity of the bank.   b)  the lower is bank capital relative to assets, the higher is the return on equity of the bank.   c)  the lower is bank capital relative to assets, the lower is the credit risk for the owners of the bank.   d)  the lower is bank capital relative to assets, the lower is the return on equity of the bank.

26. Compared to commercial banks and thrift institutions, finance companies are   Question 26 options:   a)  heavily regulated.   b)  able to attract small depositors.   c)  prevented from making relatively small loans.   d)  virtually unregulated.