Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Assets Liabilities & NW Reserves $50.00 Deposits $250.00 Securities $30.00 Borrowings $10.00 Loans $220.00 Bank Capital $40.00 Total $300.00 Total $300.00 The above balance sheet
Assets Liabilities & NW Reserves $50.00 Deposits $250.00 Securities $30.00 Borrowings $10.00 Loans $220.00 Bank Capital $40.00 Total $300.00 Total $300.00 The above balance sheet pertains to a bank. Deposits consist only of demand deposits (checkable deposits). The required reserve ratio is RRR = 10%. Someone withdraws $40 from her deposit account. Which of the following balance sheets represents the ultimate balance sheet after this transaction (after the withdrawal takes place and after the bank takes the necessary steps to comply with the Fed's reserve requirements). Balance Sheet A Assets Liabilities & NW Reserves $10.00 Deposits $210.00 Securities $30.00 Borrowings $10.00 Loans $220.00 Bank Capital $40.00 Total $260.00 Total $260.00 Balance Sheet B Assets Liabilities & NW Reserves $21.00 Deposits $210.00 Securities $30.00 Borrowings $21.00 Loans $220.00 Bank Capital $40.00 Total $271.00 Total $271.00 Balance Sheet C Assets Liabilities & NW Reserves $0.00 Deposits $210.00 Securities $40.00 Borrowings $10.00 Loans $220.00 Bank Capital $40.00 Total $260.00 Total $260.00 Balance Sheet D Assets Liabilities & NW Reserves $10.00 Deposits $210.00 Securities $10.00 Borrowings $10.00 Loans $240.00 Bank Capital $40.00 Total $260.00 Total $260.00 O Balance Sheet A O Balance Sheet B O Balance Sheet C O Balance Sheet D
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started