A small state bank currently has reserves equal to $300,000. If the state reserve requirement is 20%, but the bank feels more comfortable with maintaining a 30% reserve, what amount of deposits does the bank currently have? Group of answer choices $1,500,000 $600,000 $1,000,000 $300,000
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20%, but the bank feels more comfortable with maintaining a 30% reserve, what amount of
deposits does the bank currently have?
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- If JFINEX Bank has 10B in Peso Savings deposits, 10B worth of dollar deposits, 20B in Peso Demand deposits, and 30B in Peso Time Deposits, what is the maximum amount the bank can lend after complying with the current local reserve requirement set by the BSP? 7.20B 61.60B 8.40B 52.80B Which of the following scenarios is considered an expansionary monetary policy? A hike in reserve requirement of banks Policy rate cut by the central bank Decrease in income tax collection Both B and C Mr. JFINEX is short of funds of $10MM. He can borrow from the following counterparties with their respective bid-offer quotations applicable for O/N or 1 week: Bank A: 0.10% - 0.16%; Bank B: 0.13% - 0.17%; Bank C: 0.12% - 0.15%. At what rate will he borrow assuming there is no borrowing limit? 0.15% 0.13% 0.10% 0.17% You want to buy 30MM pesos worth of RTB 10-21. At what rate can you buy the said GS to minimize cost given quotes from the following counterparties? Bank A: 3.60% –…Choose the correct letter of answer: Company D's current assets and current liabilities are P200,000.00 and P140,000.00 respectively. How much additional funds can it borrow from banks for short term, without reducing the current ratio below 1.33? a. P13,800.00b. P86,200.00c. P52,612.00d. P35,870.00e. P41,818.003) Suppose there is a 10% reserve requirement, and the bank has the following Balance Sheet Assets Reserves Loans Securities Liabilities 55M Deposits 250M Bank Capital 45M 350M 50M Now, let's suppose there is a deposit outflow of $60 million. If the bank only finances its reserve shortages by borrowing from the Federal Reserve, show the bank's balance sheet after the deposit outflow and receiving the loan from the Fed.
- Problem A: Baumol ModelABC Corporation would like to know what is its optimal cash balance for a disbursement account. The daily averagedisbursement is P40,000. Cost to transfer money into the account average P500 each time. If the money is not in this account,it could have been kept in a mutual fund account that would let ABC earn 3% per year. 1. Total cost of holding and maintaining the optimal cash balanceQ25 Examine the chart below which contains Bank 1’s balance sheet. If the legal reserve requirement is 40%, then excess reserves are?: Assets Liabilities Total Reserves ? Demand Deposits $600,000 Loans $300,000 Question 25 options: a) $360,000 b) $60,000 c) $240,000 d) $120,000← Assets Reserves $ Securities Loans Your bank has the following balance sheet:< 50 million 50 million 150 million Liabilities Checkable deposits $200 million H Bank capital 50 million If the required reserve ratio is 10%, what actions should the bank manager take if there is an unexpected deposit outflow of $60 million?<
- Q5. Consider an economy where the required reserve ratio is 40%. Suppose Mark sells $2,000 worth of government securities to the FED and deposits the proceeds ($2,000) in Bank 1. Note that this new deposit initially increases the quantity of money by $2,000.Assume that all accounts were previously equal to 0 (or that we are only looking at changes. What will be the value of the total deposits in Bank 1.11. If the Federal Reserve decreases the reserve rate from 7% to 5%, how does this affect the amount of money that would result because of fractional-reserve banking from an initial deposit into a bank of $30,000?Assume that banks lend out all their excess reserves. Currently, the total reserves that banks hold equal $32.8 billion. If the Federal Reserve decreases its reserve requirement from 8.2 percent to 6 percent, then there is potential for the whole banking system to raise the money supply by: O $8.8 billion O $10 billion. $246 billion. O $146,7 billion O $256 billion.
- A bank has two investment options to chose from for short term investment: Option A: A money market security issued by a multinational corporation with a face value of $2000 with 120 days to maturity to be traded for $1850. Option B: A 60-day tax exempted government bill with a face value of $2000 to be traded for $1950. The corporate tax rate on bank earnings is 40%. Which security would you chose based on the after tax YTM return? Justify by showing your calculations appropriately.Consider a bank policy to hold reserves equal to 15% of bank deposits. The bank currently has $25 million in deposits and holds $1 million of excess reserves. What is the required reserve on a new deposit of $500,000? Please answer in dollars. If the Fed decides to conduct contractionary monetary policy by selling $250 million in UST bonds, how much will the money supply change by if the required reserve ration is 15%? Please express you answer in millions of dollars.Problem A: Baumol ModelABC Corporation would like to know what is its optimal cash balance for a disbursement account. The daily averagedisbursement is P40,000. Cost to transfer money into the account average P500 each time. If the money is not in this account,it could have been kept in a mutual fund account that would let ABC earn 3% per year.Required:1. Optimum cash balance2. Total cost of holding and maintaining the optimal cash balance