If the bank suffers a deposit outflow of $50 million with a required reserve ratio on deposits of 10%, will the bank suffer a reserve deficiency and if so, how much? Discuss asset side management and what would be an appropriate strategy? What will the banks balance sheet look like after adjustments? 4. Suppose Bank Z has ROE of 15% and ROA of 1%. If capital-to-asset ratios (simply called capital ratios) above 10% are considered to be well capitalized, is this bank well or poorly capitalized?

1.Each table are a simplified balance sheets of Bank of America and Central Bank for 2021. Bank of America Central Bank a. What's the percentage of loans out of total assets for Bank of America and Central Bank? What explains such a significant difference? b. What's the percentage of total deposits out of total liabilities (including capital) for Bank of America and Central Bank? Again, why do you think there is a significant difference? c. What is the size (measured as total assets) of Bank of America vs Central Bank? 2. Suppose Bank A initially started with $14 million in capital. A total of $156 million in checkable deposits is received. The Bank purchases securities worth of $50 million and the bank then makes a $50 million commercial loan and lends another $20 million in mortgage loans. If required reserves are 15%, what does the bank balance sheet look like? (be sure to indicate required and excess reserves separately in your balance sheet. You need to draw a balance sheet!)