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Your bank has the following balance sheet (Unit: million). The required reserve ratio is 10% Suppose $25 of securities become worthless for this bank. 1

Your bank has the following balance sheet (Unit: million). The required reserve ratio is 10% Suppose $25 of securities become worthless for this bank. 1 1. Show the T-account describing the effect. (10\%) 2. Update the balance sheet right after $25 of securities become worthless. (5\%) 3. Will this bank become insolvent? Why? (5\%)

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