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Original Balance Sheet Code for Information Values reference for Questions 1 through 4: in the text: Reserves 15 [A] Securities 35 [B] Loans 70
Original Balance Sheet Code for Information Values reference for Questions 1 through 4: in the text: Reserves 15 [A] Securities 35 [B] Loans 70 [C] Checkable Deposits 100 [D] Capital 20 [E] Required Reserve Ratio 12% [F] How much are the required reserves of FCB? How much are the excess reserves of FCB? (Show your computation work) For the following questions, refer to the balance sheet below: Balance Sheet In thousands of In thousands of Assets Liabilities US dollars US dollars Reserves Securities [A] [B] Checkable Deposits Capital [D] [E] Loans [C] Assume that Mrs. Smith withdraws 30% of all FCB's checkable deposits. Use T-account to show changes in FCB's balance sheet and show the resulting balance sheet (after withdrawal). 1. After Mrs. Smith's withdrawal, does FCB have the minimum required reserves according to the reserve requirement ratio? Calculate current reserves and the minimum required reserves to justify your answer. (Show your computational work) 2. In sentences, briefly explain three actions the FCB can engage to increase its reserves (three actions to obtain additional reserves to meet the requirement). Show each of the three actions in a separate T- account. You should explain each possible action and report the 3 T-accounts showing how each of these actions would impact the FCB's balance sheet. You may need to add a liability component to the bank's T- account and balance sheet for one of the possible actions the FCB can engage in.
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