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

What is their payout ratio?, The Equity accounts of Blydskap Ltd are shown ...

The Equity accounts of Blydskap Ltd are shown below: Ordinary Share Capital (R2 par value)                  R200 000 Share Premium

Resolance tube , #questionw..what is ment by resolance tube

#questionw..what is ment by resolance tube

Analytical approach of strategy, 1. Comment on influence of study design, s...

1. Comment on influence of study design, sampling strategy and scale of measurement of outcome variable, on your choice of analytical approach Study design: the study design i

Draw a gantt chart, Consider the Kristen Cookie Company case. From the n...

Consider the Kristen Cookie Company case. From the note: Wash&Mix: 6 mins per order (max 3 dozen) Dish up: 2 mins per dozen Set up timer: 1 min per dozen Bake: 9 mins per dozen

Estimate the probability , The Video Club Martin rents movies at "regular p...

The Video Club Martin rents movies at "regular price" andat  "half price". Usually if the films are regularly priced one day, they will be at regular price the next day with probab

Hedging , how to record a new hedging in your books

how to record a new hedging in your books

Vectors, What do u mean by Vectors? Explain its types.

What do u mean by Vectors? Explain its types.

Calculate the difference quotient and average velocity, A girl named Alice ...

A girl named Alice fell asleep during a discussion about the difference quotient. She did not think it could possibly have anything to do with real life. While dreaming she saw

Role of accountant, What are the roles of accountant, let me know the caree...

What are the roles of accountant, let me know the career opportunity in accounting subject?

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