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fin 353 quiz 1 answer

# fin 353 quiz 1 answer - Marks 1 If a bank has \$100,000 of...

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Marks: 1 If a bank has \$100,000 of deposits, a required reserve ratio of 10 percent, and \$37,000 in reserves, then the maximum deposit outflow it can sustain without altering its balance sheet is? Choose one answer. a. 25,000 b. 30,000 c. 10,000 d. 15,000 Question 2 Marks: 1 . Use Table 2. Below is the balance sheet for Tribank. The required reserve ratio is 10%. Deposits fall by \$10 million. How much money does the bank need to meet required reserves if any? Table 2 Assets Liabilities Reserves \$ 16million Checkable Deposits \$100 million Bank Capital \$ 11 million T-bills \$45 million Loans \$50 million Choose one answer. Question 3 Marks: 5 Based on the videos we have seen how did the fractional reserve banking system come about? The banking system did not start using fractional reserves but it evolved to become fractional reserve banking. How did the videos explain why?

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Question 4 Marks: 1 Other things equal, if the required reserve ratio was increased: Choose one answer. Question 5 Marks: 1 Use Table 5. Assume there is a loan loss of \$10 million dollars. What is the old and new capital ratio? Table 5 Assets Liabilities Reserves \$10 million Deposits \$85 million Loans \$90 million Capital \$15 million Choose one answer.
You are logged in as Qian Lu ( Logout ) You are here iLearn / FIN035303-F11R / Quizzes / Quiz I / ► Attempt 1 Quiz I <div> <h2 class="main">JavaScript must be enabled to continue!</h2> </div> Page: (Previous) 1 2 3 4 5 6 7 (Next) Question 11 Marks: 1 Assets Liabilities Reserves \$10million Checkable Deposits \$100 million Excess Reserves \$5 million Bank Capital \$ 10 million T-bills \$45 million Loans \$50 million Use Table above. Suppose there is a deposit outflow of \$5 million dollars. The required reserve ratio is 10%. Are there excess reserves or a shortfall in reserves? Choose one answer. a. Excess of 1 million. b. Shortfall of 0.5 million. c. Excess of 0.50 million.

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d. Shortfall of 1 million
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