The friendly National Bank holds $50 million in reserves at its Federal Reserve District Bank. The required reserves ratio is 12 percent.a. If the bank has $600 million in deposits, what amount of...

1 answer below »









The friendly National Bank holds $50 million in reserves at its Federal Reserve District Bank. The required reserves ratio is 12 percent.a. If the bank has $600 million in deposits, what amount of vault cash would be needed for the bamk to be in compliance with the required reserves ratio?b. The Friendly National Bank holds $10 million in vault cash, determine the required reserves ratio that would be needed for the bank to avoid a reserves deficitc. If the Friendly National Bank experiences a required reserves deficit, what actions can it take to be in compliance with the existing required reserves ratio?



Answered Same DayDec 29, 2021

Answer To: The friendly National Bank holds $50 million in reserves at its Federal Reserve District Bank. The...

Robert answered on Dec 29 2021
128 Votes
The friendly National Bank holds $50 million in reserves at its Federal Reserve District Bank. The required
reserves ratio is 12 percent.
a. If the bank has $600 million in deposits, what amount of vault cash would be needed for the bank to be in
compliance with the required reserves ratio?
Reserve requirement = Deposits x Required reserve ratio
 $600,000,000 x 12%
 $72,000,000
Vault cash required to meet...
SOLUTION.PDF
SOLUTION.PDF

Answer To This Question Is Available To Download

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here
Have files?