Royal Bank has the following hypothetical balance sheet as December 31, 2019:

Reserves $30m, loans $110m, and Deposits $120m. The desired reserve ratio is 10% and the net profit of the bank is $2m

1. The return on equity of the bank is 10%. How much is capital of the bank?

Calculate the return on assets, and the equity multiplier.

Calculate the desired reserve and the excess reserve, if any.

Additional deposits of 10m were added and 5m of loans were offered to new clients. Recalculate the return on assets, the return on equity, and the equity multiplier.

Recalculate the desired reserve and the excess reserve, if any.

"marni value of future cuth How Ly 1+1 (1+1)8 Ly FP Fined payment loan value G C P I'macat Value of Coupon land Hair of Return an Coupon Fond Con Y Di sol T C P M Current yield = 1. = P Current Ticld CP DUR = (1+i)' CP (141)