Calculate the equity capital of reserve bank of australia

Assignment Help Financial Management

Reference no: EM132007728

International Financial Institutions and Markets 1 Assignment 2 (of 6) Due: March 27th

The following items are a simplified version of recent balance sheet data relating to the Reserve Bank of Australia:

Government securities $50bn

Government balance $45bn

Exchange settlement account balances $30bn

Net foreign currency reserves (and gold) $70bn

Other assets $2bn

Currency at issue $60bn

Accounts due to foreign central banks and others $10bn

Loans to private banks $40bn 1.

1. Classify each of the above individually as either an asset or a liability of the Reserve Bank of Australia.

2. Draw up a balance sheet for the Reserve Bank of Australia, using the above data, recording Assets on the left, and Liabilities and Equity Capital on the right. Assume all the assets and liabilities of the RBA have been included in the above list.

3. Calculate the equity capital of the Reserve Bank of Australia.

4. Suppose the Reserve Bank of Australia makes a loan of $2bn to the National Australia Bank, which is a private bank. How does this affect the balance sheet of the Reserve Bank of Australia? Which item or items change, and by how much?

5. Suppose the Reserve bank of Australia pays a dividend of $5bn to the Australian Commonwealth Government. How does this affect the balance sheet of the Reserve Bank of Australia? Which item or items change, and by how much?

6. Can the Reserve Bank of Australia go bankrupt? If so, how could this happen? If not, why not.

Reference no: EM132007728

Questions Cloud

What types of situations generally create pressure : What types of situations generally create pressure and stress for you? How do you handle these situations? When you think about successful leaders.

Importer of a product that is being subsidized : If the United States is a net importer of a product that is being subsidized or dumped by Japan, not only do U.S. consumers gain

How does the type of carbohydrate impact health : What is meant by the AMDR, and what is this range for carbohydrates? How does the type of carbohydrate impact health?

Working at the restaurant and he gets : When Charlie maximizes his utility, he spends at least 1 hour per week working at the restaurant and he gets at least 1 hour of leisure time.

Calculate the equity capital of reserve bank of australia : Calculate the equity capital of the Reserve Bank of Australia. Can the Reserve Bank of Australia go bankrupt?

Describe the policies for each of the two compliance plans : Are you ready to present the policies for your two compliance plans in a way that all employees will understand at a large medical facility /

Environment while maintaining a viable place : Are there examples in place today of manufacturers and/or retailers who have taken steps to reduce their pollution impact, both air quality and industrial.

Economic benefits of industrialization outweigh : Do the economic benefits of industrialization outweigh the economic costs?

What impact do these laws have on ethical standards : Some of us think that there is too much government when it comes to providing health care services.There are very strict rules for new drugs and clinical trial.

User Account

All Pages