User Account

All Pages

What is pbcs target reserve ratio

Assignment Help Macroeconomics
Reference no: EM13121701

Question

The Prudential Bank of Canada (PBC) currently has $2000 in cash reserves, $53,000 in loans, $50,000 in deposits, and $5,000 in shareholder equity. It is currently satisfying its target reserve ratio.

a) Show the PBC balance sheet. What is PBC's target reserve ratio?

b) How much "bank capital" does PBC currently have? Explain.

c) Suppose a new customer opens an account at PBC and deposits $2000 into that account. Show PBC's balance sheet immediately after this deposit, and compute PBC's new reserve ratio.

d) Based on part (c), what do you now expect PBC to do, and why? Show the balance sheet after these actions are taken.

e) Starting from the endpoint of your answer to part (d), assume that one of PBC's existing customers withdraws $3000 from their account. What do you expect PBC to do, and why? Show the balance sheet after these actions are taken.

Reference no: EM13121701

Questions Cloud

What is the ratio of plasma membrane proteins : Assume that all proteins on their way to other compartments remain in the ER for 30 minutes on average before exiting, and that the ratio of proteins to lipids in the membranes of all compartments is the same.
The real or the nominal interest rate : Which interest rate represents the opportunity cost of holding money - the real or the nominal interest rate? Explain and argue intuitively why the nominal interest rate (eg, the yield on a riskless bond) cannot fall below zero.
Probability- distribution and expected value : Probability : Distribution and Expected Value, A large sports conference moved to have women compose at least 40% of its athletics within 5 years
How are these applicable to dna fragments : What are two physical properties that can be used to separate or to characterize proteins.
What is pbcs target reserve ratio : Show the PBC balance sheet. What is PBC's target reserve ratio and how much "bank capital" does PBC currently have? Explain.
Calculate value of test statistic for random sample : Waiting time is normally distributed. Calculate the value of the test statistic for your random sample rounded to two decimal places?
What is a recent example of applying genomics : What is a recent example of applying genomics to pathogen epidemics [name the organism]? What do these tools allow you to do specifically .
Amortization deduction for the year of purchase : Sam pays $10,000 for the business's goodwill and another $10,000 for the seller's covenant not to compete for the next five years. Compute Sam's amortization deduction for the year of purchase.
Find point estimate for the population proportion : A survey of 600 non-fatal accidents showed that 251 involved the use of a cell phone. Find a point estimate for p, the population proportion of accidents that involved the use of a cell phone.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Values of goods produced and included in gdp

Decide if the values of the goods produced are included in the 2006 GDP and explain your reasoning.

  Find the maximum and average levels of inventory

A company yearly sells 7,890 units. The cost of placing an order is $100 and the carrying costs are $2 a unit. What is the EOQ, the duration of the EOQ,

  Explain how would the number of workers hired

Explain how would the number of workers hired (variable input) change. This is a profit maximizing firm, also explain the profit maximization condition the firm uses.

  Concept of equilibrium whenever dealing with quantity-price

Under the concept of equilibrium whenever dealing with quantity and price.

  Effects of an adverse technological shock

Explain two effects of an adverse technological shock on the labor market and on the output market - explain two effects of an adverse technological shock on the labor market and on the output market.

  Conflicts of interest faced by an investment advisor

Discuss and explain two conflicts of interest faced by an Investment Advisor who is employed by a commercial bank or an investment bank?

  Effect of before tariff and after tariff on price

Consider the market for fresh produce in Snowland. Fresh produce is produced expensively in hothouses in Snowland.

  Questions on aggregate supply and long-run equilibrium

What are the advantages of Fed increasing interest rates if the GDP gap is positive?

  What is the effect on the value of checkable deposits

Suppose that any money lent by a bank is always deposited in a checkable deposit and that the reserve ratio is 10%. The Fed purchases $100 million in Treasury bills.

  Assume the normal production process for beet sugar

Assume the normal production process for beet sugar uses high-sulfur oil for fuel and releases 2 units of sulfur dioxide to the air for every ton of beet sugar produced.

  Explain how much should jet blue charge

Explain how much should Jet Blue charge for a Business Class ticket.

  Relationship among japan and korea''s unemployment

What is the relationship among Japan and Korea's unemployment. What Trends do you see in the data set.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd