Fall_2010_Midterm_II_Review_Questions

Fall_2010_Midterm_II_Review_Questions - Midterm II Review...

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Midterm II Review Suppose the First National Bank of Duckburg (FNBD) has $180 million in deposits, $25 million reserves, $40 million in municipal bonds, $140 million in loans, and $10 million in cash items in the process of collection. a. How much capital does FNBD have? b. If the required reserve ratio is 10%, how much in excess reserves does FNBD have? c. Prepare FNBD’s balance sheet.
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Another one! To practice on your own! Solutions provided below.
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Stocks Problem:
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Options
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Multiple Choice Futures & Options 1 Derivatives are financial instruments that: A) Present low levels of risk and are used by people who otherwise couldn't purchase the financial assets. B) When used correctly can actually lower risk. C) Should only be used by people seeking high returns from high risk. D) a and b 2 The value of a derivative contract is ultimately determined by: A) The value of the underlying asset. B) SEC regulation. C) The Federal Reserve D) The risk-free rate of return. 3 The short position in a futures contract represents the party that will: A) Accept the risk. B)
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This note was uploaded on 02/22/2011 for the course ECO 029 taught by Professor Anthonyp.o'brien during the Spring '08 term at Lehigh University .

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Fall_2010_Midterm_II_Review_Questions - Midterm II Review...

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