The balance sheet of a bank follows. Suppose that the reserve requirement is 3 p

Question

The balance sheet of a bank follows. Suppose that the reserve requirement is 3 percent on the first $30 million of checkable deposits and 10 percent on checkable deposits in excess of $30 million. (Amounts on the balance sheet are in millions of dollars.) Assets - Reserves $15.90 Loans $150.00 Securities $34.10 Total - $200.00 Liabilities + Capital - Transactions deposits $180.00 Equity capital $20.00 Total - $200.0 Suppose that the bank sells $5 million in securities to get new cash. Show the bank

Explanation / Answer

you didn't upload the table. But fortunately i know this question. So i am writting its solution


$30 million times 3% = $.9 million and $150 Million times 10% = $15 Million
So we have the total Reserve is = to $15.9 million, thus the excess reserve is zero

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