In 2020, Bank of the West held US$46.1 billion, US$4.4 billion, and US$6.0 billion of funds in
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Question:
In 2020, Bank of the West held US$46.1 billion, US$4.4 billion, and US$6.0 billion of funds in demand, savings, and time deposits. On these deposits, the bank paid interest of 0.41%, 0.04%, and 1.81% respectively.
1. In a table, list the three sources of funds and amounts in order of interest rate from lowest to highest. 2. On a diagram with funds in billions of dollars on the horizontal axis and interest rate on the vertical axis, illustrate the (i) marginal cost of funds, and (ii) average variable cost of funds. 3. If the bank had to downsize, which type of deposits should it reduce?
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