Assuming that Stanbic Bank has branches A, B, C D etc. and it receives a deposit of 50,000 Shs from a particular person. It then removes a cash ratio of 15%. Explain how Stanbic Bank will create credit among her different branches. Discuss the factors that limit the process of credit creation in any country.
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Qn. 3
- Assuming that Stanbic Bank has branches A, B, C D etc. and it receives a deposit of 50,000 Shs from a particular person. It then removes a cash ratio of 15%. Explain how Stanbic Bank will create credit among her different branches.
- Discuss the factors that limit the process of credit creation in any country.
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- \\Assumes that commercial banks have a 20% fixed liquidity ratio. When Mr. Farhan Yaseen deposits PKR 1000 into a Bank. By the credit creation process, what is the maximum amount of loans that the banks can create? required calculation in the paperAssume the annual fixed term deposit rate is 3.4% in a New Zealandbank. Mary has $10,000 and plans to deposit into the bank for two years. She also wants thebank to reinvest her interests. The bank gives her the option to choose payment frequencyin each year from 1, 2, and 4. The frequency tells how many times the bank pays her theinterests. Suppose there is no interest tax.a) How much Mary will get when the deposit matures after two years, when the interestpayment frequencies per year are 1, 2, and 4 times, respectively? Which option is bestfor Mary? [5 marks]b) Former Chief Economist, John McDermott, in the Reserve Bank of New Zealand, saysthat inflation is a thief in your wallet. Suppose the inflation rate in New Zealand inthe coming a few years is 2%. What are the real rates of returns of the annual bankdeposit rate under the approximation rule, and in the exact relationship, respectively.Give the cash reserve requirement Cr of 20% initial client's deposit of ush 500,000 and assuming all financial transactions take place in banks. (I). Compute the final and actual deposits
- Please no written by hand solution 1 a) Assuming that Stanbic Bank has branches A, B, C D etc. and it receives a deposit of 50,000 Shs from a particular person. It then removes a cash ratio of 15%. Explain how Stanbic Bank will create credit among her different branches. b) As a student of macroeconomics, what do you think, the government will do to achieve the forecasted drops in inflation rates. c) Discuss the major effects of taxes on the performance of our economy d) Advise the government on some of the major guiding principles they should follow when introducing a tax system e) Discuss the factors that limit the process of credit creation in any country Kindly please do not use GOOGLE ( No Copy and Past)A4 Suppose Aurumville Bank has $20300 in assets, and its total capital equals $11000. What is the total value of Aurumville Bank’s liabilitiesThe Additional Insured—Vendors (HO 07 51) endorsement to a homeowners policy extends the definition of insured to include The property manager of the insured premises. Lessor(s) of the insured's premises. Independent contractors or agents named in the schedule. Mortgageholder(s) of the insured premises.
- What are the challenges faced by banks in Oman due to COVID 19The bank wants to receive a fair value in t=0 of 100,--EUR for her risky bond. 1. Please briefly explain how the conditions of the issued bond have to be amended by the bank.The economic of quarter illegal currently has a level of M2 $100000. If saving is 20000 dollars and money market fund is 10000$ What is the level of M1 in the economy.
- 13. According to the PFRS for SMEs, foreign activities can be conducted a. by entering into foreign currency transactions b. by having foreign operations c. a or b d. the PFRS for SMEs does not address this matter.It is the practice of almost all banks in the Philippines that when they grant a loan that the interest for one year is automatically deducted from the principal amount upon release of money to borrow. Let us therefore assume that you applied for a loan with a bank and the amount of 80,000.00 was approved at an interest rate of 14% of which 11,200.00 was deducted and you were given a check of 68,800.00. Since you have to pay 80,000.00 one year after, what then will be the effective interest rateThe final answer should have been 9000 as: c) Let CU be currency in circulation Old MS = CU + R*[1/reserve deposit ratio] = CU + existing created deposits = CU + 30000 New MS after deposit = [CU – 1000] + [existing created deposits] + [newly created deposits] = [CU -1000] + [30000] + [1000*1/0.1] Difference = -1000 + [1000/0.1] = 9000Why is this so?