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Page of a 1. (20 points) The following is a simplified balance sheet for Local Horse and Trader Bank (LITB). Show all work for potential

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Page of a 1. (20 points) The following is a simplified balance sheet for Local Horse and Trader Bank (LITB). Show all work for potential partial credit. Assume that in iudition to our renerve requirement, we are me a bank must have capital ratio of 5%, where capital is mentred against only koun vuhie. Acta Liabilities + Net Worth Required Reserves Demand Deposit $500,000 Ex Reserve $10,000 Lane $470,000 Net Worth $30,000 (1) Calculate the required reserve ratio and current capital ratio. (b) How much additional money could the bank lend out today and still moet its reserve requirement today in the event the loans were not releponited at the same bank? I (c) Assume the bank makes the loan from the previous part of the question, and the lo are redeposited at the same bank. Write out the new balance sheet (d) wd on the capital requirement, what would be the for the maximum total at LHTB. Assume the bank makes now loans up to that amount. Aenean now loans are deposited at the bank Write out this new balance sheet (a) How does the bank in pot duce their balance beet how do they make it balance? What marionre we referring to which imtitution regularly interes in this misky Page of a 1. (20 points) The following is a simplified balance sheet for Local Horse and Trader Bank (LITB). Show all work for potential partial credit. Assume that in iudition to our renerve requirement, we are me a bank must have capital ratio of 5%, where capital is mentred against only koun vuhie. Acta Liabilities + Net Worth Required Reserves Demand Deposit $500,000 Ex Reserve $10,000 Lane $470,000 Net Worth $30,000 (1) Calculate the required reserve ratio and current capital ratio. (b) How much additional money could the bank lend out today and still moet its reserve requirement today in the event the loans were not releponited at the same bank? I (c) Assume the bank makes the loan from the previous part of the question, and the lo are redeposited at the same bank. Write out the new balance sheet (d) wd on the capital requirement, what would be the for the maximum total at LHTB. Assume the bank makes now loans up to that amount. Aenean now loans are deposited at the bank Write out this new balance sheet (a) How does the bank in pot duce their balance beet how do they make it balance? What marionre we referring to which imtitution regularly interes in this misky

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