If a bank has excess reserves of R4,000 and demand deposit liabilities of R100,000, and if the reserve requirement is 15 percent, then the bank has actual reserves of A) R17,000. B) R19,000. C) R24,000. D) R29,000.
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- If a bank has
excess reserves of R4,000 and demand deposit liabilities of R100,000, and if the reserve requirement is 15 percent, then the bank has actual reserves of - A) R17,000.
- B) R19,000.
- C) R24,000.
- D) R29,000.
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- A commercial bank has $80000 in deposits. There are $6,000 in actual resources, of which $2,000 are excess reserves. Describe the Rate of return.First National Bank Assets Liabilities Rate-sensitive $40 million $50 million Fixed-rate $60 million $50 million If interest rates rise by 5 percentage points, say from 10 to 15%, bank profits (measured using gap analysis) willFirst National Bank Assets Liabilities Rate-sensitive $40 million $50 million Fixed-rate $60 million $50 million If interest rates rise by 5 percentage points, say from 10 to 15%, bank profits (measured using gap analysis) will increase by $_________ million (negative if it decreases). Question 19 options:
- Assuming that the average duration of First National Bank's $100 million assets is five years, while the average duration of its $80 million liabilities is three years, then a 5 percentage point decrease in interest rates will cause the net worth of First National to increase by $ million dollars (put a negative sign if it is a decrease). Question 17 options:When the required reserve ratio is 0.10, what is the maximum increase in checkable deposits achievable with an increase in reserves of $750? Group of answer choices A) $7,500 B) $750 C) $850 D) $825 E) $8,250You have been promoted to head of Treasury and Investment Management at Ecobank andhave been handed information on a number of issues for which immediate answers arerequired. For each excerpt from the issues presented below answer the associatedquestion(s):(i) Ecobank holds ¢500 million T-Bill but is in short of cash. It needs cash to meetthe requirement of a customer who has come to withdraw ¢400million.Youhave been asked to approach Barclays Bank to sell the T-Bill for ¢495 millionwith agreement to repurchase within 4 working days.(a) How much in cedis does Ecobank lose in this transaction(b) What is the Repo Rate on this transaction (ii) You have just been offered a commercial paper with a face value of ¢45,000,000which bears a discount of 36% and has 182 days to mature.(a) How much will you be prepared to pay for this paper? (b) What is the cedi discount on the paper? (iii) Ecobank plans to issue a 2-year bond with a face value of ¢500,000,000 bearing20% coupon rate. The market…
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- “Bank managers should always seek the highest returnpossible on their assets.” Is this statement true, false, oruncertain? Explain your answerQ) An economy has high powered money of $10 million. If cash drain is known to be 10%, find the required reserve ratio to ensure that total deposit by commercial banks will be $80 million without any excess reserve. A. 2.50% B. 5% C. 10% D. 20% Solve this earlyQ) An economy has high powered money of $10 million. If cash drain is known to be 10%, find the required reserve ratio to ensure that total deposit by commercial banks will be $80 million without any excess reserve A. 2.50% B. 5% C. 10% D. 20%