Please can someone please help me this week The reserve requirement is 3% on the

Question

Please can someone please help me this week
The reserve requirement is 3% on the 1st $30 million of transacation deposits and 10% on transcation deposit in excess of $30 million.the bank holds no required clearing balances.

Bank Balance Sheet ( amounts in millions of dollars)
Assets------------Liabilities+Capital
Reserve15.9------Transactions 180.0
Securities 34.1---Deposits 0
Loans 150.0-----Capitals 20.0
Total Assets 200.0---Total Liabilities+ Capital 200.0


Question; Suppose that the bank makes a loan to a customer of an amount equal to the amount of its excess reserve from part B. Draw up the bank's balance sheet before the customer spends the proceeds of the loan. what are the banks excess reserves?

Question: Now suppose that the customer spends the proceeds of the loan. Draw up the bank's balance sheet, and calculate its excess reserves

Explanation / Answer

SOLUTION : a. Statutory reserve required = 30*0.03 +(180-30)*0.10 = $15.9 millions. Actual reserve = $15.9 millions. Excess reserve = $ 0 (ANSWER). b. On sale of securities of $5 m, the Balance Sheet of the Bank : (in million dollars)

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