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(a) What is the minimum amount of assets that a rm needs to have to be able to borrow directly from the market Without also

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(a) What is the minimum amount of assets that a rm needs to have to be able to borrow directly from the market Without also borrowing from banks? (b) Suppose that the banking system has 1 unit of capital in total. What is the equilibrium expected rate of return demanded by banks, denoted by B in Freixas and Rochet, i.e. the level of 6 such that the supply of banking capital equals the demand for bank loans from rms ? (c) How many rms will be able to invest in their project in equilibrium? (d) Suppose that the banking system's level of capital is reduced to 0.5 units of capital in total? Now how many rms will be able to invest in their project in equilibrium? (Need a calculator)

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