Abbix has a complex financial system with the following

Assignment Help Corporate Finance

Reference no: EM13381232

ABBIX has a complex financial system with the following relationships: the ratio of required reserves to total deposits is 15 percent, and the ratio of noncheckable deposits to checkable deposits is 40 percent. In addition, currency held by the nonbank public amounts to 20 percent of checkable deposits. The ratio of government deposits to checkable deposits is 8 percent. Initial excess reserves are $900 million F. Now assume that currency held by the nonbank public, drops to 15 percent of checkable deposits and the ABBIX's target money supply is charged to $3.0 billion. What would the required reserves ratio have to be to reach the new target M1 money supply amount? Assume the other oringinal ratio relationships hold.

Reference no: EM13381232

Questions Cloud

The simplex financial system is characterized by a required : the simplex financial system is characterized by a required reserves ratio of 11 percent initial excess reserves are 1

Judy johnson is choosing between investing in two treasury : judy johnson is choosing between investing in two treasury securities that mature in five years and have par values of

You are serving a jury a plaintiff is suing the city for : you are serving a jury. a plaintiff is suing the city for injuries sustained after a freak street sweeper accident. in

A new bank has vault cash of 1 million and 5 million in : a new bank has vault cash of 1 million and 5 million in deposits held at its federal reserve district bank.a if the

Abbix has a complex financial system with the following : abbix has a complex financial system with the following relationships the ratio of required reserves to total deposits

1 one of the key issues in managing the finances of a firm : 1. one of the key issues in managing the finances of a firm is achieving the correct balance between debt and equity

A 3- year fully amortizing constant payment mortgage loan : a 3- year fully amortizing constant payment mortgage loan for 320000 is to be made with an interest rate of 5.

Question 1consider an asset which pays continuous : question 1consider an asset which pays continuous dividend.nbsp letnbsp s 100 and r10.nbspsuppose the 6-month futures

Understanding returns1 you purchase 1000 shares of spears : understanding returns.1 you purchase 1000 shares of spears grinders inc. stock for 45 per share. a year later the stock

User Account

All Pages