Reference no: EM131943946
Use the balance sheet below (for the friedman National Bank) to answer the next series of questions. Assume the reserve requirement is 10% against DD and the capital requirement is 10%(of total assets)
Assets Liabilities plus Capital
Cash $ 5,000 Demand Deposits (consumers) $ 50,000
Federal Reserve account $ 35,000 Demand Deposits (Business Firms) $100,000
Securities $ 60,000 Time and saving deposit $75,000
Loans $ 100,000 Capital $ 25,000
Building $ 50,000
Total $250,000 Total $ 250,000
1. Friedman National has excess reserve of................................................
2. The maximum new loan that Friedman National can make without incurring a required reserve deficiency is............................................
3. Friedman National’s Holding of earning assets are:..........................................