Imagine you are a bank manager. Currently, your bank holds $4 million in deposits at a...

Imagine you are a bank manager. Currently, your bank holds $4 million in deposits at a 4% interest rate. However, you need to increase the total deposits to $6 million. The interest rate elasticity of savings is 1.20. What interest rate should you offer to depositors to obtain the required amount, all other things being equal? Use the midpoint method and round to two decimal places throughout your calculations. Enter your answer in the box below.

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jeff jeffy answered 2 years ago

Part 1: A small regional bank, Bank of Cascadia, has deposits of $600 million. It holds...

Part 1: A small regional bank, Bank of Cascadia, has deposits of $600 million. It holds reserves of $50 million, government bonds worth $40 million, and corporate bonds worth $30 million. It has made loans of $500 million. · Set up a T-account balance sheet for the bank, with assets and liabilities, and calculate the bank’s net worth. · Describe the asset-liability time mismatch that Bank of Cascadia and all banks face. Part 2: Explain what happens to the bank’s...

If a bank has $10 million in total deposits from customers, holds $3 million in reserves,...

If a bank has $10 million in total deposits from customers, holds $3 million in reserves, and has a reserve requirement of 20% imposed by the Fed, which statement is TRUE? The bank's reserve ratio is 20%, and the bank is fully loaned-up. The bank's reserve ratio is 30%, and the bank is not fully loaned-up. The bank's reserve ratio is 20%, and the bank is not fully loaned-up. The bank's reserve ratio is 30%, and the bank is fully...

Bank of Wakanda has deposits of $1.2 billion. It holds reserves of $120 million and government...

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34. On May 1, Jobs Bank (JB) holds $200 million in deposits and is required by...

34. On May 1, Jobs Bank (JB) holds $200 million in deposits and is required by the Federal Reserve to maintain a reserve ratio of 12.5%. JB holds twice the minimum of amount of reserves required by the Federal reserve. Part 1: Show a T-account for JB on May 1. Part 2: On May 5, JB’s largest depositor, Switzer, withdraws $20 million from her account. (a) Show JB’s T-account immediately after Switzer withdraws $20 million from her account. (b) Immediately...

The manager of the bank where you work tells you that your bank has $5 million...

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Imagine that you are a fund manager in charge of making investment decision. Your organization currently...

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You are the finance manager of a company and currently your company has $100 million in...

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A bank holds its reserves as and . a. securities; loans b. securities; deposits at...

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Bank Three currently has $650 million in transaction deposits on its balance sheet. The Federal Reserve...

Bank Three currently has $650 million in transaction deposits on its balance sheet. The Federal Reserve has currently set the reserve requirement at 8 percent of transaction deposits. a. If the Federal Reserve decreases the reserve requirement to 4 percent, show the balance sheet of Bank Three and the Federal Reserve System just before and after the full effect of the reserve requirement change. Assume Bank Three withdraws all excess reserves and gives out loans and that borrowers eventually return...

Bank Three currently has $450 million in transaction deposits on its balance sheet. The Federal Reserve...

Bank Three currently has $450 million in transaction deposits on its balance sheet. The Federal Reserve has currently set the reserve requirement at 8 percent of transaction deposits. a. If the Federal Reserve decreases the reserve requirement to 6 percent, show the balance sheet of Bank Three and the Federal Reserve System just before and after the full effect of the reserve requirement change. Assume Bank Three withdraws all excess reserves and gives out loans and that borrowers eventually return...

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