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Consider the balance sheet for River City Bank below. Use the information in the balance sheet to answer the following question. Assume the reserve requirement
Consider the balance sheet for River City Bank below. Use the information in the balance sheet to answer the following question. Assume the reserve requirement is 10% on checkable deposits. River City Bank What is the level of the Bank's capital? Jose, a checking account holder, withdraws $5000 from his account. How does this affect the Bank's assets and liabilities? Does the bank face an immediate problem as a result of this transaction? If so, what can the Bank do to overcome this problem? Assume that because of a recession there is widespread default. $50,000 of the loans go bad and need to written off. Does the Bank face a problem? What could the Bank have done to avoid this
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