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Assets Liabilities (unit in million). Reserves $60 Checkable deposits $100 Securities 50 Nontransaction deposits 135 Loans 150 Bank capital 25 Input your answers of
Assets Liabilities (unit in million). Reserves $60 Checkable deposits $100 Securities 50 Nontransaction deposits 135 Loans 150 Bank capital 25 Input your answers of the following questions in order to three input boxes. For example, the first input box is for your answer to question 1). 1) If there is an unexpected checkable deposit outflow of $100 million, what is the immediate effect on the balance sheet: please describe which item(s) will be changed and the associated new number(s)? Is there any liquidity risk and why? 2) If there is an unexpected nontransaction deposit outflow of $120 million, is there any liquidity risk and why? 3) Assume that the bank has to sell its loans, the price is still the same as original; that is $1 paid for each dollar; the bank must sell $____ loans and bank capital will be $____ 4) If the price to sell the loans is 50 cents for each dollar(at a fire sale price) of loan, the bank must sell $ loans and bank capital will be $
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