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Bank has the following balance sheet

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Bank has the following balance sheet. Bank has the following balance sheet. Reserves = $760, Loans = $7,800, T-bills = $560, Deposits = $8,000, and Debt = $800. Reserve requirement is 8%. Suppose value of loans drops by 2%. How this even impacts bank's equity?

  • Decreases by 50%
  • Decreases by 63%
  • Increases by 50%
  • Increases by 63%

Reference no: EM131355090

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