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4 . ( 1 5 ) The bank you own has the following balance sheet.AssetsReserves$ 8 0 millionLiabilitiesDeposits$ 6 0 0 millionSecurities 5 0 millionBorrowings
The bank you own has the following balance sheet.AssetsReserves$ millionLiabilitiesDeposits$ millionSecurities millionBorrowings millionLoans millionBank capital milIlon a Assume there is an unexpected deposit outflow of $ million. Please restate the balance sheet to reflect this change b If the bank management wants to hold required reserves at how much must be added to the bank's reserve account? c On the restated balance sheet, please show the necessary changes if management decides to borrow from another bank? d What would be the costs of this action? E Which action is more costlyborrowing from the Federal Reserve or borrowing from another bank in the Federal Funds market? Why
The bank you own has the following balance sheet.AssetsReserves$ millionLiabilitiesDeposits$ millionSecurities millionBorrowings millionLoans millionBank capital milIlon a Assume there is an unexpected deposit outflow of $ million. Please restate the balance sheet to reflect this change b If the bank management wants to hold required reserves at how much must be added to the bank's reserve account? c On the restated balance sheet, please show the necessary changes if management decides to borrow from another bank? d What would be the costs of this action? E Which action is more costlyborrowing from the Federal Reserve or borrowing from another bank in the Federal Funds market? Why
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