1.7 a and b. And pleasr use what is in the picture and dont add your own stuff please and thank you

512 512 CHAPTER 14 Money Banks, and the Federal Reserve System 3.8 Related to the Apply the Concept "Help for Young or Towers Pintech or Celings on interest Rates?" An article in the Wall Street Journal on fintech firm Social Finances Inc (So) noted that Sofi's main business of refinancing stue dent loans is particularly sensitive to interest rates. Lacking its own base of deposits, the company borrows money at variable rates from banks to the lend to recent graduates." a. What does it mean to refinance a loan? In what circum- stances would a borrower want to refinance a loan? b. What does the article mean by a base of deposits? What do conventional banks use their base of deposits for? c. What advantages might fintech firms like Soi have over conventional banks that would allow them to succeed in making loans even though they lack a base of deposits 3.9 Suppose that Deja owns a McDonald's francese. She decides to move her restaurant's checking account to Wells Fargo which causes the changes shown on the following Taccount if the required reserve ratio is 0.10 or 10 percent, and Wells Fargo currently has no excess reserves, what is the maximum loan Wells Fargo can make as result of this transaction Wells Fargo Assets Liabilities Reserves $100,000 Deposits +$100,000 3,10 Consider the following simplified balance sheet for a bank Assets Liabilities Reserves $10,000 Deposits $70,000 Loans $66,000 Stockholders' equity $5.000 C. If the bank makes the loans in part show the ate effect on the bank's balance sheet 3.11 An article in the Wall Street Journal noted that for a small.com munity bank in upstate New York, only 47% of deposits were lentout, compared with 6% at Bank of America. Does the fraction of their deposits that banks lend out have anything to do with the size of the money supply Briefly explains. 3.12 loted to the Don't Let This Hoppen to You Don't Con Pune Anse and liabilities" Briefly explain whether you agree with the following statement Assets are things of value that people own. Liabilities are debts. Therefore, a bank will always consider a checking account deposit to be an asset and a car loan to be a liability 3.13 Related to Solved Problem 14.3 Suppose you deposit $2.000 in currency into your checking account at a branch of Bank of America, which we will assume has no excess reserves at the time you make your deposit. Also assume that the required reserve ratio is 0.20 or 20 percent a. Usea T-account to show the initial effect of this transac tion on Bank of America's balance sheet. b. Suppose that Bank of America makes the maximum loan it can from the funds you deposited. Using a T-account, show the initial effect of granting the loan on Bank of America's balance sheet. Also include on this T-account the transaction from part al c. Now suppose that whoever took out the loan in part b) writes a check for this amount and that the person receiving the check deposits it in a branch of Citibank. Show the effect of these transactions on the balance sheets of Bank of America and Citibank after the check has been cleared. On the Teaccount for Bank of Amer ka, include the transactions from parts (A) and h) d. What is the maximum increase in checking account deposits that can result from your $2.000 deposit? What is the namum increase in the money supply? Briefly explain 2. If the required reserve ratio 10.10, or 10 percent, how much in excess reserves does the bank holde b. What is the maximum amount by which the bankcan expand its loans Ref E 512 512 CHAPTER 14 Money Banks, and the Federal Reserve System 3.8 Related to the Apply the Concept "Help for Young or Towers Pintech or Celings on interest Rates?" An article in the Wall Street Journal on fintech firm Social Finances Inc (So) noted that Sofi's main business of refinancing stue dent loans is particularly sensitive to interest rates. Lacking its own base of deposits, the company borrows money at variable rates from banks to the lend to recent graduates." a. What does it mean to refinance a loan? In what circum- stances would a borrower want to refinance a loan? b. What does the article mean by a base of deposits? What do conventional banks use their base of deposits for? c. What advantages might fintech firms like Soi have over conventional banks that would allow them to succeed in making loans even though they lack a base of deposits 3.9 Suppose that Deja owns a McDonald's francese. She decides to move her restaurant's checking account to Wells Fargo which causes the changes shown on the following Taccount if the required reserve ratio is 0.10 or 10 percent, and Wells Fargo currently has no excess reserves, what is the maximum loan Wells Fargo can make as result of this transaction Wells Fargo Assets Liabilities Reserves $100,000 Deposits +$100,000 3,10 Consider the following simplified balance sheet for a bank Assets Liabilities Reserves $10,000 Deposits $70,000 Loans $66,000 Stockholders' equity $5.000 C. If the bank makes the loans in part show the ate effect on the bank's balance sheet 3.11 An article in the Wall Street Journal noted that for a small.com munity bank in upstate New York, only 47% of deposits were lentout, compared with 6% at Bank of America. Does the fraction of their deposits that banks lend out have anything to do with the size of the money supply Briefly explains. 3.12 loted to the Don't Let This Hoppen to You Don't Con Pune Anse and liabilities" Briefly explain whether you agree with the following statement Assets are things of value that people own. Liabilities are debts. Therefore, a bank will always consider a checking account deposit to be an asset and a car loan to be a liability 3.13 Related to Solved Problem 14.3 Suppose you deposit $2.000 in currency into your checking account at a branch of Bank of America, which we will assume has no excess reserves at the time you make your deposit. Also assume that the required reserve ratio is 0.20 or 20 percent a. Usea T-account to show the initial effect of this transac tion on Bank of America's balance sheet. b. Suppose that Bank of America makes the maximum loan it can from the funds you deposited. Using a T-account, show the initial effect of granting the loan on Bank of America's balance sheet. Also include on this T-account the transaction from part al c. Now suppose that whoever took out the loan in part b) writes a check for this amount and that the person receiving the check deposits it in a branch of Citibank. Show the effect of these transactions on the balance sheets of Bank of America and Citibank after the check has been cleared. On the Teaccount for Bank of Amer ka, include the transactions from parts (A) and h) d. What is the maximum increase in checking account deposits that can result from your $2.000 deposit? What is the namum increase in the money supply? Briefly explain 2. If the required reserve ratio 10.10, or 10 percent, how much in excess reserves does the bank holde b. What is the maximum amount by which the bankcan expand its loans Ref E