Bank expected liquidity deficit or surplus over next week

Assignment Help Financial Management

Reference no: EM131347253

John Camey, the money manager of the First State Bank, has estimated that the bank has a 20 percent chance of a liquidity deficit of $700 million, a 30 percent chance of a liquidity deficit of $200 million, a 30 percent chance of a liquidity surplus of $400 million and a 20 percent chance of a liquidity surplus of $900 million over the next week. What is the bank's expected liquidity deficit or surplus over the next week? A. $100 million liquidity surplus B. $100 million liquidity deficit C. $400 million liquidity surplus D. $500 million liquidity surplus E. $0 liquidity surplus

Reference no: EM131347253

Questions Cloud

What could be the impact if there was error in understanding : What could be the impact if there was an error in understanding? An explanation for how you will remember the components of your topic. Is there an acronym you created? Can you create a quick limerick?

What is the bank liability liquidity reserve : A bank currently has $50 million in stable deposits against which they want to keep 10% reserves, $100 in vulnerable deposits against which they want to keep 40% reserves, and they have $50 million in "hot money" deposits against which they want to k..

Describe the distribution of chargeable hours : STAT1060- Business Decision Making - Estimate the probability of this minimum number of Chargeable hours being achieved. Show your working. Do NOT use the computer to get a more accurate answer.

Discuss about the case given below : IRBs (institutional review boards) came into being in part as a response to pretty egregious violations of human dignity in the name of research (for example th Nazi medical experiments and the Tuskegee syphilis study). The Keystone project is a ..

Bank expected liquidity deficit or surplus over next week : John Camey, the money manager of the First State Bank, has estimated that the bank has a 20 percent chance of a liquidity deficit of $700 million, a 30 percent chance of a liquidity deficit of $200 million, a 30 percent chance of a liquidity surplus ..

Use an annual cash flow analysis : When John purchased his home, he borrowed $200,000 from his bank at 6% interest rate per year to be repaid in 360 equal annual end-of-month payments in 30 years. The new loan would be made equal to the balance due on the old loan plus the $2,000 serv..

What is the bank total legal reserve requirement : The Shirley State Bank has $90 million in transaction deposits subject to legal reserves. The bank must hold 3 percent legal reserves up to $43.9 million of transaction deposits and 10 percent legal reserves on any amount above this. What is the bank..

What are the implications for macroeconomic policy : Write down the government budget constraint and explain how it can be used to understand the relationship between fiscal and monetary policies.

Residential economic irr calculations-sensitivity case : A development of a track of homes is started during an economic slow period. The pessimistic estimate is that the project will take 18 months. The forecast development costs are: Month’s 1-6 at an expenditure rate of $900,000 per month, the expenditu..

User Account

All Pages