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What is the maximum amount of loans the bank can make

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1. Main Street Bank sets its loans on the basis of a 5% reserve requirement and has $100 million cash in its vaults.

2. What is the maximum amount of loans the bank can make?

3. If the bank has made loans of $50 million to real estate ?rms and is required to keep a 50% reserve requirement against such loans, how does this change your answer?

Reference no: EM13887934

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