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Tonya Bradley FIN 100 Homework week 2 Chapter 4 Ex: 2 As an executive of a bank or thrift institution, you are faced with an intense seasonal demand for loans. Assuming that your loanable funds are inadequate to take care of this demand, how might your Reserve Bank help you with this problem? An important function of the federal Reserve Bank is to provide loans to depositories at times when additional funds are needed. A loan may be based on the promissory rate of the borrowing depository, or alternatively, the depository may discount certain assets in its portfolio with the federal Reserve Bank of its district. The loan arrangement is the best option. Chapter 5 P1 BANC ONE ASSETS LIABILITIES Reserves 2000 Deposit 10,000 Loans 8000 P6. Assume a financial system has a monetary base (MB) of $25million. The required reserve
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