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6. If the required reserve ratio is 10% and a banks balance sheet has the following: Assets: Reserves $15 million; Loans $150 million; Securities $50

6. If the required reserve ratio is 10% and a banks balance sheet has the following:

Assets: Reserves $15 million; Loans $150 million; Securities $50 million.

Liabilities: Deposits $150 million; Borrowed funds $35 million; Bank Capital $30 million.

a. What is the amount of excess reserves the bank is currently holding?

b. What are the options available to the bank if customers decide to withdraw $10 million in deposits?

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