Make without incurring required reserve deficiency

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Reference no: EM131943946

Use the balance sheet below (for the friedman National Bank) to answer the next series of questions. Assume the reserve requirement is 10% against DD and the capital requirement is 10%(of total assets)

Assets Liabilities plus Capital

Cash $ 5,000 Demand Deposits (consumers) $ 50,000

Federal Reserve account $ 35,000 Demand Deposits (Business Firms) $100,000

Securities $ 60,000 Time and saving deposit $75,000

Loans $ 100,000 Capital $ 25,000

Building $ 50,000

Total $250,000 Total $ 250,000

1. Friedman National has excess reserve of................................................

2. The maximum new loan that Friedman National can make without incurring a required reserve deficiency is............................................

3. Friedman National’s Holding of earning assets are:..........................................

Reference no: EM131943946

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