Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

MMB Bank's Management team has decided to holda 58 percent reserve of hot money deposits, 36 percent reserve of vulnerable deposits and a 6

 

MMB Bank's Management team has decided to holda 58 percent reserve of hot money deposits, 36 percent reserve of vulnerable deposits and a 6 percent reserve of core funds. The estimated reserve requirements on majority deposits are 1.75 percent, except for savings deposits cany a zero percent reserve requirement and all checkable deposits above RM100 million cany a 4.8 percent reserve requirement. MMB Bank curently has total loans outstanding of RM5,391 million, which half mpnth ago were as high as RM5,017 million. Given the MMB bank's loans average annual growth rate of 5 percent, estimate the total liquidity requirement (both low and high estimate) for cument month. Checkable deposit (RM million) Saving deposit (RM million) Nonpersonal time deposit (RM million) Source Hot money fund Vulnerable fund 1,478 1,345 333 456 123 Stable fund 1,888 789 246

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Low estimate Hot money fund 175 x 333 456 117 Vulnerable fund 175 x 1345 14... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Accounting Principles Volume II

Authors: Larson Kermit, Jensen Tilly

14th Canadian Edition

71051570, 0-07-105150-3, 978-0071051576, 978-0-07-10515, 978-1259066511

More Books

Students also viewed these Accounting questions

Question

Differentiate. y = ln(3x + 1) ln(5x + 1)

Answered: 1 week ago

Question

Describe the sources of conflict in the workplace.

Answered: 1 week ago