Question
1. Base your answers on the Excel spread sheet that I attached to assignment 5. Calculations based on two decimal places and eleven iterations of
1. Base your answers on the Excel spread sheet that I attached to assignment 5. Calculations based on two decimal places and eleven iterations of the loan-deposit-reserve process. When the initial open market purchase is $2,000 and the reserve requirement is 10%, M1 increases by $13,732.38. (allow for a discrepancy of + or - $100 between your answer and my answer)
True
False
| Transaction # | omp | loan | Deposit | percent loan deposited | rr$ | rr% |
| 0 | $1,000 | $1,000.0000 | $1,000.0000 | 100.0000% | $500.0000 | 50% |
| 1 | $500.0000 | $500.0000 | $250.0000 | 50.0% | ||
| 2 | $250.0000 | $250.0000 | $125.0000 | 50.0% | ||
| 3 | $125.0000 | $125.0000 | $62.5000 | 50.0% | ||
| 4 | $62.5000 | $62.5000 | $31.2500 | 50.0% | ||
| 5 | $31.2500 | $31.2500 | $15.6250 | 50.0% | ||
| 6 | $15.6250 | $15.6250 | $7.8125 | 50.0% | ||
| 7 | $7.8125 | $7.8125 | $3.9063 | 50.0% | ||
| 8 | $3.9063 | $3.9063 | $1.9531 | 50.0% | ||
| 9 | $1.9531 | $1.9531 | $0.9766 | 50.0% | ||
| 10 | $0.9766 | $0.9766 | $0.4883 | 50.0% | ||
| Creation of M1 | $1,999.0234 | $999.5117 |
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Intermediate Financial Management
Authors: Eugene F. Brigham, Louis C. Gapenski
4th Edition
0030754828, 978-0030754821
