Question
Question 4 (A) Answer the following parts (i) and (ii). (i) A commercial bank has the following balance sheet figures as below. The reserve requirement
Question 4
(A) Answer the following parts (i) and (ii).
(i) A commercial bank has the following balance sheet figures as below. The reserve requirement is 9% and this bank is trying to meet exactly the minimum reserve requirement by selling off its securities. Reflecting this change, make the new balance sheet for this bank. [10%]
| Assets | Liabilities | ||
| Reserves | $0 | Deposits | $90 million |
| Loans | $90 million | Bank capital | $12 million |
| Securities | $10 million |
(ii) Calculate the risk-weighted assets considering a bank with the following balance sheet. Show all your work. [15%]
| Assets | Liabilities | ||
| Required reserves | $16 million | Checkable deposits | $200 million |
| Excess reserves | $6 million | Bank capital | $12 million |
| T-bills | $90 million | ||
| Mortgages | $80 million | ||
| Commercial loans | $20 million |
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Beyond Greed And Fear Understanding Behavioral Finance And The Psychology Of Investing
Authors: Hersh Shefrin
1st Edition
0195161211, 978-0195161212
