NewBank started its first day of operations with $122 million in capital. A tota

Question

NewBank started its first day of operations with $122 million in capital. A total of $105

million in checkable deposits is received. The bank makes a$21

million commercial loan and another $22

million in mortgage loans. The required reserve ratio is

9.7 %.

( Note:

Information is based on NewBank's first month of operations.)

Complete NewBank's balance sheet shown below: (Round your responses to the nearest whole number.)

Assets

Liabilities

Required reserves

$___

million

Checkable deposits

$___

million

Excess reserves

$___

million

Bank capital

$___

million

Loans

$___

million

Assets

Liabilities

Required reserves

$___

million

Checkable deposits

$___

million

Excess reserves

$___

million

Bank capital

$___

million

Loans

$___

million

Homework: Prep 6 (Ch 9: Banking...Financial Institutions) Score: 0.2 of 1 pt MN Score: 70%, 42 of 6 p End-of-Chapter Exercise 21 is 9. 7% (NOle form aton is based on Neweark's first month of operators ) Complete NewBank's balance sheet showm below (Round your responses to the neareat whole number) Excess reserves Bank capital 2 3

Explanation / Answer

Checkable deposits: 105 MN

Bank Capital: 122 MN

Required reserves: It is the minimum percentage of deposits to be kept with the bank

Hence.. 9.7% of 105 MN= 10.185= 10

Loans: Commercial loan+ Mortgage loans= 22+21= 43 MN

Now Excess reserves= Total liabilities-required reserves-loans

=227-43-10

=174 MN

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---