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20. Consider the following hypothetical bank's balance sheet: Table 8.2 Balance Sheet (in $bn) Column A Column B Loans 6800 Deposits 7500 Investments 3700 Short-term

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20. Consider the following hypothetical bank's balance sheet: Table 8.2 Balance Sheet (in $bn) Column A Column B Loans 6800 Deposits 7500 Investments 3700 Short-term Debt 300 Cash & Reserves 1100 Long-term Debt 1800 (a) What is column A? What is Column B? (b) Calculate the bank's net worth. () Calculate the leverage ratio of this bank. (d) Reserve requirements obligate banks to hold a specified percentage of their deposits in cash and reserves. Capital requirements require banks to have a specified percentage of their assets supported by equity (net worth). Suppose reserve requirements are 3 percent, and capital requirements are 10 percent, does the bank meet its requirements? (e) What is the largest percentage decrease in total asset values that the bank can survive without going bankcupt? (f) If the bank's investments decrease by 1000, what is the bank's leverage ratio

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