What the balance sheet would look like if the desired

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Reference no: EM133435047

Question: First, show what the balance sheet would look like with the following financial details:

Demand deposits - $29 million
Advances from the Bank of Canada - $1 million
Fixed Deposits - $31 million
Securities - $ 26 million
Non-mortgage Loans - $35 million
Reserves and Cash - $10.5 million
Mortgage Loans - $25 million
Borrowings - $25 million

Hint: See Chapter 12 (pg.273), Table 12.1, for more information and references

Second, show what the balance sheet would look like if the desired reserves are 8 percent. Assume that Great Wests started operations with $6 million in capital. It then receives $100 million in chequable deposits. The bank makes a $25 million commercial loan and another $25 million in mortgages. Ignore any loan loss reserves.

Reference no: EM133435047

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