Question
a) Using the information provided, construct a balance sheet for The Sample Bank USABank. That is, properly list the assets, liabilities, and bank capital of
a) Using the information provided, construct a balance sheet for The Sample Bank USABank. That is, properly list the assets, liabilities, and bank capital of The Sample Bank USA Bank in a T-Account format.
b) What is the reserve ratio for The Sample Bank USA Bank? If the reserve requirement is 15%, what is the excess reserves ratio for this bank?
c) If the reserve requirement is 15% and this bank is willing to have a 0% excess reserves ratio, how much deposit outflow from checking accounts can they sustain?
d) If the reserve requirement is 30% and this bank is willing to have a 0% excess reserves ratio, how much deposit inflow from saving deposits would they need?
e) Assume the Central Bank were to sell $100 of short-term securities to this bank. If the reserve requirement is 15% and this bank is willing to have a 0% excess reserves ratio, what action, if any, could the bank take to achieve comply with the reserve requirement (provide one example).
The following table provides balance sheet information for a bank. You will use this information for Question 3) and 4). Sample Bank USA Category Bank Capital Checkable Deposits Long-term CDs Long-term Loans Long-term Securities Money Market Deposit Accounts Reserves Saving Deposits Short-term Loans Short-term Securities Variable Rate CDs Variable Rate Loans $ Value $50 $600 $50 $150 $200 $100 $150 $125 $250 $150 $75 $100 Duration 1 9 20 10 1 0 5 1 0.5 2 0.5
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