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A: Hi! thanks for the question but as per the guidelines, we can answer only one question at one time.…
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- The Bangladesh Bank has created additional money worth Tk70,794 crore through variousrefinance schemes and easing regulatory requirements after the Covid-19 outbreak in March forstimulating demand to revive the declining economy. (link:https://tbsnews.net/economy/banking/bangladesh-bank-creates-money-worth-over-tk70000cr-revive-economy-76435?fbclid=IwAR108OXKcbXq6JjZj6v9FbULrDtys_QsZySUTKeAmauoqTjppgnLqU89muw#.Xq5kdXhgRqq.facebook).Do you think creating this additional money will lead to inflation? What type of inflation,demand-induced or supply-induced? Do you think it will be continued inflation? Why? Draw arelevant diagram to explain your answer.The Bangladesh Bank has created additional money worth Tk70,794 crore through various refinanceschemes and easing regulatory requirements after the Covid-19 outbreak in March for stimulatingdemand to revive the declining economy (link: https://tbsnews.net/economy/banking/bangladesh-bank-creates-money-worth-over-tk70000cr-revive-economy-76435?fbclid=IwAR108OXKcbXq6JjZj6v9FbULrDtys_QsZySUTKeAmauoqTjppgnLqU89muw#.Xq5kdXhgRqq.facebook) What type of monetary policy is this? Expansionary or contractionary? Draw a diagram toexplain your answer.First National BankAssets LiabilitiesRate-sensitive R40 million R50 millionFixed-rate R60 million R50 millionIf interest rates rise by 5 percentage points, say from 10 to 15%, bank profits (measuredusing gap analysis) will
- The Bangladesh Bank has created additional money worth Tk70,794 crore through various refinance schemes and easing regulatory requirements after the Covid-19 outbreak in March for stimulating demand to revive the declining economy. (link: https://tbsnews.net/economy/banking/bangladesh-bank-creates-money-worth-over-tk70000cr-revive-economy-76435?fbclid=IwAR108OXKcbXq6JjZj6v9FbULrDtys_QsZySUTKeAmauoqTjppgnLqU89muw#.Xq5kdXhgRqq.facebook). Do you think creating this additional money will lead to inflation? What type of inflation, demand-induced or supply-induced? Do you think it will be continued inflation? Why? Draw a relevant diagram to explain your answer.The Bangladesh Bank has created additional money worth Tk70,794 crore through various refinance schemes and easing regulatory requirements after the Covid-19 outbreak in March for stimulating demand to revive the declining economy. (link: https://tbsnews.net/economy/banking/bangladesh-bank-creates-money-worth-over-tk70000cr-revive-economy-76435?fbclid=IwAR108OXKcbXq6JjZj6v9FbULrDtys_QsZySUTKeAmauoqTjppgnLqU89muw#.Xq5kdXhgRqq.facebook). Creating additional money will increase money supply. What will happen to price level? Which theory did you use to answer the question? Explain the theoryAssuming 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 increase in interest rates will cause the net worth of First National to _decrease_______ by $___13_____ million dollars. I got decreased by 13 million I took assets 25%(5%x5yrs) then liabilities 15%(5%x3) then 25 million off assests and 12 million liabilities 25-12=13 million increase; 15 decline; 5 increase; 25 decrease; 13
- The 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?Explain and illustratethe deposit creationprocess throughT-accounts1. One of the consideration in making investments which allows the investor to increase the value of its assets to offset increase in the level of prices. a. TAX SHELTERb. LIQUIDITYc. INFLATION HEDGEd. PROTECTION OF CAPITAL 2. It facilitate the flow of funds from the suppliers to the demanders in the financial market. *a. GOVERNMENTb. FINANCIAL INSTITUTIONc. NET DEMANDERS OF FUNDSd. NET SUPPLIER OF FUNDS
- 1. A bank reports the following items on its latest bat ance sheet allowance for loan and lease losses. $42 million, undivided profits, $81 million; subordinated debt capital. S3 million common stock and surplus, $27 million; equity notes, $2 million; minor. ity interest in subsidiaries, S4 million; mandatory convertible debt, s5 million; identifiable intangible assets, $3 million and noncumulative perpetual preferred stock, S5 million. How much does the bank hold in Tier 1 capital? In Tier 2 capital? Does the banks have 100 much Tier 2 capital?Due date: Friday November 20, 2015Too Big to FailAmerican International Group, INC (AIG) caseIntroductionAIG is the story of a company, and its network of financial partners, who tookunprecedented risk and fell because of it. To prevent global economic disaster, the U.S.government came to its rescue. This has resulted in the biggest taxpayer bailout of a privatecompany in American history.BackgroundAmerican International Group, Inc. – also known as AIG – is an Americanmultinational insurance corporation with more than 88 million customers in 130 countries. AIGcompanies employ over 64,000 people in 90 countries. The company operates through three corebusinesses: AIG Property Casualty, AIG Life and Retirement and United Guaranty Corporation(UGC). AIG Property Casualty provides insurance products for commercial, institutional andindividual customers. AIG Life and Retirement provides life insurance and retirement services inthe United States. And UGC focus…Assume 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.
