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A bank has the following assets and liabilities. Assets: Reserves = 22; Gov bonds = 34; Corp bonds =24; Loans = 100. == Liabilities: Deposits
A bank has the following assets and liabilities. Assets: Reserves = 22; Gov bonds = 34; Corp bonds =24; Loans = 100. == Liabilities: Deposits = 125; Borrowing 35; Capital = 20. Required reserve ratio = 10% (of deposits). How much are required and excess reserves? : a. Required reserves = 22; excess reserves = 0. b. Required reserves = 9.5; excess reserves = 12.5. c. Required reserves = 12.5; excess reserves = 9.5. d. Required reserves = 2.2; excess reserves = 22
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