5.

The T-account below shows the balance sheet of Santander.

Assets:

Reserves 10 million

Loans 400 million

Securities 200 million

Liabilities:

Deposits 500 million

Borrow from other banks 20 million

Borrow from FED 50 MILLION

Bank Capital 40 million

A) If the required reserve ratio is 10%, what is the minimum amount of reserves (in millions of $) that Santander is required to hold? Round your answer to at least 2 decimal places. (E.g. $12,345,678 should be entered as 12.35)

B) To meet the reserve requirement, Santander has decided to borrow from the Fed. How much should Santander borrow (in millions of $) from the Fed so that Santander has exactly enough reserve to meet the reserve requirement? Round your answer to at least 2 decimal places. (E.g. $12,345,678 should be entered as 12.35

C) To meet the reserve requirement, Santander has decided to borrow from the Fed. Which entries in Santander's balance sheet will be affected by this transaction? Check all that apply.

D) Based on the balance sheet above, if borrowers of Santander defaulted on $50 million of its loans, what will be the amount of bank capital (in millions of $) of Santander? Round your answer to at least 2 decimal places. (E.g. $12,345,678 should be entered as 12.35)

E) Based on the balance sheet above, what is Santander's equity multiplier (EM)? Round your answer to at least 2 decimal places.

F) Based on the balance sheet above, if Santander's net profit after tax is $10 million, what is Santander's return on assets (in %)? Round your answer to at least 2 decimal places.

G) Based on the balance sheet above, if Santander's net profit after tax is $10 million, what is Santander's return on equity (in %)? Round your answer to at least 2 decimal places.