Reference no: EM131774783
Question: The Bank of Montreal (BMO)'s assets include cash in the vault which is one third of it's deposits at the Bank of Canada. BMO has $700,000 in loans, $1.1 million in securities as well as $2.0 million in chequing account balances on behalf of households and businesses. BMO has zero excess reserves. The public holds $400,000 in cash. The Bank of Canada has $600,000 in total liabilities which includes $50,000 of Federal Government's Deposit.
1. Bank's Deposits held at the Bank of Canada. = 150,000
2 . Desired Reserves (DR) = 200,000
3. Desired Reserve Ratio (R/D) = 10%
4. Currency Drain Ratio (C/D) = 20%
5. Money Multiplier (MM) = 10
Given the information above, it the Bank of Canada wants to increase the Money Supply by $1 Million, then:
6. (a) Should the Bank of Canada Buy or Sell securities?
(b) How Much? Calculate and Show your Work.
7. (a) Will the Bank of Canada increase or decrease BMO's Reserves?
(b) How much will the Monetary Base change? Calculate and Show your work.
8. (a) What will be the New amount of Excess Reserves at BMO?
(b) What will be the amount BMO loans out in the Banking System?
9. How much will be RE-Deposited into the next Bank? Calculate and Show your work.
10. How much will the public hold back and not re-deposit into the Banking System? Calculate and Show your work.
Compute taxable income for standard company is based
: Compute taxable income for Standard Company is based on the following data.
|
How much is the unit cost per? customer
: In? October, the company earned $ 559,000 in revenues and incurred the following operating costs from 400 ?customers:
|
Use the cash flow approach
: Use the cash flow approach (insider's viewpoint approach). Show the EUAC values used to make your decision:
|
Determine the current balance of retained earnings
: Problem - Computation of Retained Earnings, Total income since incorporation $287,000, Determine the current balance of retained earnings
|
How much will be re-deposited into the next bank
: How much will the public hold back and not re-deposit into the Banking System? Calculate and Show your work.
|
What are some day to day items you encountered
: On the income statement, the net income figure is important, but I stress operating earnings more - as it's a better indicator of a company's day to day.
|
Record the treasury stock transactions
: Problem - Treasury Stock-Cost Method, Record the treasury stock transactions (given below) under the cost method of handling treasury stock
|
Define elastic portion of the demand curve for tickets
: Based on resale prices for tickets for the 2013 Super Bowl in New Orleans, face - value prices for the most expensive tickets to the 2014 game are expected.
|
Discuss signing a long-term note payable for the balance
: Purchased equipment costing $87,400 by paying $52,000 cash and signing a long-term note payable for the balance
|