Question
Suppose a group of investors put together $300,000 to form Vita Bank, which now has those $300,000 as assets, and the investors own stock shares
Suppose a group of investors put together $300,000 to form Vita Bank, which now has those $300,000 as assets, and the investors own stock shares totaling that same amount. How will the following events appear on Vita's balance sheet? a. The purchase of $270,000 worth of property. b. The addition of $120,000 in deposits after the doors open to the public. Now consider Vita's willingness to create loans using their excess reserves. If the required reserve ratio is 5%, how many deposits can Vita create on its own? How much will it need to maintain in reserves
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