Balance sheet-actual reserves , Basic Statistics

Assignment Help:

(a)   The bank's excess reserves are its actual reserves less required reserves. Actual reserves are given as $450 from its balance sheet. Required reserves are given by the product of the required reserve ratio and demand deposits, i.e., 10% * $5,000 = $500. Thus the excess reserves are equal to $450 - $500 = -$50. This implies that the bank has no excess reserves and even it does not maintain the required reserve ratio.

(b)  The bank can lend an additional amount equal to its excess reserves. But since in this case, there are no excess reserves, the bank cannot lend anything.

 


Related Discussions:- Balance sheet-actual reserves

Adjusting entries, The notes receivable were accepted from several customer...

The notes receivable were accepted from several customers. The notes were issued on Sept. 1,2011 and will be settled together with a 20% interest on May 31, 2011.

Binomial expansion, what is the largest coefficient of (1+3x)^4 is ?

what is the largest coefficient of (1+3x)^4 is ?

Confidence interval, Questions 1. A genetic experiment with peapods res...

Questions 1. A genetic experiment with peapods resulted in one sample of offspring that consisted of 443 green peapods and 170 yellow peapods.  Construct a 95% confidence inter

Discrete random variable, ABC company has 2000 accounts receivable. The mea...

ABC company has 2000 accounts receivable. The mean and standard deviation are $300 and $50, respectively. Assume that the accounts are normally distributed.

Domain, select and list five items used to sample the domain in childhood o...

select and list five items used to sample the domain in childhood obesity

Mineral water factory., what is the point that i have to konow about the co...

what is the point that i have to konow about the cost accounting inorder to eneter in job

Transitioning from gaap to ifrs, How important do you think knowledge trans...

How important do you think knowledge transfer and training will be to help in transitioning from GAAP to IFRS? Manager 1: Knowledge transfer is going to be extremely importan

Assignment, Discuss about the scalling techniques

Discuss about the scalling techniques

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd