Question five: 1o poi a Assume that the bank rate of the operating band of Bank of Canada is 1 75% What is the target overnight rate? b Assume that Royal Bank of Canada left a big postive balance, overnight in the settlement balances in LVTS-Large Value Transfer System) That will result in Bank of Canada paying 1 75% on that positive balance True or False? explain Now suppose that, to tighten monetary policy, the Bank of Canada announces, at 9.00 a.m. that it is adjusting the operating band up by 25 basis c points (0 25%) What is the new bank rate? What is the target overnight rate? d If later in the day the settlement balances are trading below the target overnight rate How would Bank of Canada use its instruments - Open market operation (SPRA-Special Sale and Resale Agreement, SRAs -Sale and Repurchase Agreements, and Government deposit shifting) to infiuence the overnight rate in a manner that leaves aggregate settlement balances unchanged at the end of the day? You can use a hypothetical T-accounts to explain Question five: 1o poi a Assume that the bank rate of the operating band of Bank of Canada is 1 75% What is the target overnight rate? b Assume that Royal Bank of Canada left a big postive balance, overnight in the settlement balances in LVTS-Large Value Transfer System) That will result in Bank of Canada paying 1 75% on that positive balance True or False? explain Now suppose that, to tighten monetary policy, the Bank of Canada announces, at 9.00 a.m. that it is adjusting the operating band up by 25 basis c points (0 25%) What is the new bank rate? What is the target overnight rate? d If later in the day the settlement balances are trading below the target overnight rate How would Bank of Canada use its instruments - Open market operation (SPRA-Special Sale and Resale Agreement, SRAs -Sale and Repurchase Agreements, and Government deposit shifting) to infiuence the overnight rate in a manner that leaves aggregate settlement balances unchanged at the end of the day? You can use a hypothetical T-accounts to explain