For the question 1, you only need the answers of the question letter B showing the calculation. Excel is not necessary.

For the question 2, please, showme the calculation. Excel is not necessary.

Thank you kindly!

Question 1

A) Suppose that National Bank of Guerneville has 35 million in checkable deposits, Commonwealth Bank has $42 million in checkable deposits, and the required reserve ratio for checkable deposits is 10%. If National Bank of Guerneville has $4 million in reserves and Commonwealth has $5 million in reserves, how much in excess reserves does each bank have?

National Bank of Guerneville has $ 0.5 million in excess reserves.

(35*10% = 3.5 4 - 3.5= 0.5)

Commonwealth Bank has$0.8 million in excess reserves.

(42*10% = 4.2 5-4.2 = 0.8).

B)Now suppose that a customer of National Bank of Guerneville writes a check for$2 million to a real estate broker who deposits the check at Commonwealth. After the check clears, how much in excess reserves does each bank have?

National Bank of Guerneville has $_____ million in excess reserve. (This is suposed to be negative number)

Commonwealth Bank has $ ____million in excess reserves.

Question 2

The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB):

U.S. Treasury bills $20

Demand deposits $39

Mortgage-backed securities $26

Loans from other banks $6

C&I loans $52

Discount loans $10

NOW accounts $37

Savings accounts $9

Reserve deposits with Federal Reserve $5

Cash items in the process of collection $5

Municipal bonds $10

Bank building $3

If RNB's assets have an average duration of three years and its liabilities have an average duration of Two years, what is RNB's duration gap?