The average vault cash for the computation period has been estimated to be $1 million per day. a. What level of average daily reserves is required to be held by the bank during the maintenance period, May 11 – 24?
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The average vault cash for the computation period has been estimated to be $1 million per day.
a. What level of average daily reserves is required to be held by the bank during the maintenance period, May 11 – 24?
b. Is the bank in compliance with the requirements?
c. What amount of
d. If the average cost of funds to the bank is 8 percent per year and deposits at the Fed pay 0.5 percent, what is the effect on the income statement for this bank for this reserve period?
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- When $100 is deposited in the banking system, it leads to maximum expansion in bank deposits of $1,000. What is the required reserve ratio assuming that the excess reserves are 0 Question 7 options: 10% 5% 0% 20%Suppose the simplified consolidated balance sheet shown below is for the entire commercial banking system and that all figures are in billions of dollars. The reserve ratio is 10 percent. Instructions: Enter your answers as a whole number. a. What is the amount of excess reserves in this commercial banking system? $ billion What is the maximum amount the banking system might lend? $ billion Show in columns 1(a) and 1'(a) how the consolidated balance sheet would look after this amount has been lent. Enter these new values in the gray shaded cells of the given table. What is the size of the monetary multiplier? b. Using the original figures, answer the questions in part a assuming the reserve ratio is 5 percent. What is the amount of excess reserves in this commercial banking system? $ billion What is the maximum amount the banking system might lend? $ billion Show in columns 1(b) and 1'(b) how the…A treasury manager would like to develop a funds concentration policy for her staff to use to determine when to transfer funds using a wire transfer or an ACH transfer. The pertinent information appears below. Each wire costs $25 Each ACH transfer costs $0.75 Opportunity cost of funds is 5% Earnings credit rate is 1% Reserve requirement ratio is 10% For a mid-week transfer, what is the minimum transfer balance that justifies a wire transfer? For transfers made on Friday, what is the minimum transfer balance that justifies a wire transfer?
- Assume equilibrium federal funds rate is strictly between discount rate and interest on reserves. Draw demand, supply and equilibrium for the market of reserves below. (Label axis, curves and equilibrium point)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.Assume the Continental National Bank's balance statement is as follows:Assets:reserves $40,000loans $25,000securities $110,000Liabilities + net worthcheckable deposits $130,000stock shares $45,000Assuming a legal reserve ratio of 20 percent, how much in excess reserves would this bank have after a check for $10,000 was drawn and cleared against it?$3,000.$24,000.$6,000.$16,000.
- Value Total reserves: $ 90 billion Transactions deposits: $ 750 billion Cash held by public: $ 400 billion Required reserve ratio: 0.10 Now assume that the public transfers $40 billion in cash into transactions accounts. How much would the total lending capacity of the banking system be after this portfolio switch? How large would the money supply be if the banks fully utilized their lending capacity?Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to “Calculate,” you must show how you arrived at your final answer. The following is the balance sheet for Garrett Bank, one of many commercial banks in a country. Assume a 10 percent reserve requirement. ASSETS LIABILITIES Reserves – $5,000 Demand Deposits – $20,000 Business Loans – $10,000 Equity – $5,000 Student Loans – $8,000 Government Loans – $2,000 TOTAL ASSETS – $25,000 TOTAL LIABILITIES – $25,000 2. Calculate Garrett Bank’s required reserves. Calculate the maximum amount of additional loans that Garrett Bank can make without selling its holdings of government securities. 3. Assuming that Garrett Bank and other banks now lend out all excess reserves, calculate the maximum possible change in demand deposits throughout the banking…Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to “Calculate,” you must show how you arrived at your final answer. The following is the balance sheet for Garrett Bank, one of many commercial banks in a country. Assume a 10 percent reserve requirement. ASSETS LIABILITIES Reserves – $5,000 Demand Deposits – $20,000 Business Loans – $10,000 Equity – $5,000 Student Loans – $8,000 Government Loans – $2,000 TOTAL ASSETS – $25,000 TOTAL LIABILITIES – $25,000 Calculate Garrett Bank’s required reserves. Calculate the maximum amount of additional loans that Garrett Bank can make without selling its holdings of government securities. Assuming that Garrett Bank and other banks now lend out all excess reserves, calculate the maximum possible change in demand deposits throughout the banking…
- Suppose People's Bank of China buys 20 billion yuan of government securities from ICBC. Show how the transaction changes the balance sheets by filling in the numbers. People's Bank of China Assets (billions of yuan) Liabilities (billions of yuan) Securities enter your response here Reserves of ICBC enter your response here ICBC Assets (billions of yuan) Liabilities (billions of yuan) Securities enter your response here Reserves enter your response hereYou 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 are required.For each excerpt from the issues presented below answer the associated question(s):(i) Ecobank holds ¢500 million T-Bill but is in short of cash. It needs cash to meet therequirement of a customer who has come to withdraw ¢400 million. You have beenasked to approach Barclays Bank to sell the T-Bill for ¢495 million with agreementto 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?Assuming that the cash held by the public drops to $5,000,000 with and equal amount becoming excess reserves and the required reserves ratio drops to 12 percent