A bank may also borrow reserves from its Federal Reserve District Bank at its “discount window.” The interest rate charged is the: A. Federal funds B. Federal funds rate C. Discount rate D. Bank interest rate
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- A bank may also borrow reserves from its Federal Reserve District Bank at its “discount window.” The interest rate charged is the:
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A. |
Federal funds |
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B. |
Federal funds rate |
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C. |
Discount rate |
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D. |
Bank interest rate |
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- In general, Banks earn profits by ... Group of answer choices a. Charging depositors an interest rate greater than the pay out to borrowers b .Charging the Federal Reserve an interest for using the banks money c. Charging borrowers an interest rate greater than they pay out to depositors d .Earning payments from the Federal Reserve each time they borrow money from the Federal ReserveA bank has outstanding loans of $7,500, reserves of $2,500, and deposit liabilities of $10,000. If the required reserve ratio is 10%, this bank: A. Is holding excess reserves of $1,000 B. Is in a position to make a new loan for $1,500 C. Is in a position to make a new loan for $2,500 D. Has less reserves than requiredCommercial banks that go to the discount rate window to borroe funds from the Federal Reserve, may not be able to borrow funds from other bank based on the Fed Funds rate a. needs to pay a penalty rate to borrow from the Federal Reserve b. c. may need that their internal balances and accounts be serutinized by the Federal Reserve All of the above d.
- Use a diagram to describe the structure of a bank bill.When a bank issues a loan to a customer: A) bank assets fall by the amount of the loan. B) the composition of bank assets changes so that bank reserves increase and the value of bank loans decreases. C) bank assets rise by the amount of the loan. D) the composition of bank assets changes so that bank reserves decrease and the value of bank loans increases.The First National Bank has $100million in chequable deposits. The desired reserve ratio is 6%. (i) Calculate the Bank's reserves. Round your answer to two decimal places. (ii) The Bank desires to invest $30million in Treasury bills. The Treasury bills are currently trading at $4986.7 (including brokerage fee). How many Treasury bills does the Bank purchase? Round your answer to the nearest whole number. (iii) The Bank makes commercial loans of $25millions and lends $39.3million in mortgages. Calculate the amount of bank capital. (iv) Complete the balance sheet of the Bank. (v) Assume that there is a shortfall of reserves because depositors withdraw $5million from the Bank. Show the new balance sheet of the Bank. What can the Bank do to eliminate the shortfall of reserves?
- The federal funds rate A. equals the discount rate. B. only matters to banks and has very little impact on individual consumers. C. is set by the Federal Reserve Bank. D. is the rate that banks charge each other for short-term loans of excess reserves.The task I am struggling with: Tracy Williams deposits $500 that was in her sock drawer into a checking account at the local bank. The reserve ratio is 10%. a) how dies the deposit initially change the T-account of the local bank? How does it change the money supply? b) If the bank maintains a reserve ratio of 10%, how will it respond to the new deposit? c) if every time the bank makes a loan, the loan results in a new checkable bank deposit in a different bank equal to the amount of the loan, by how much could the total money supply in the economy expand in response to Tracy´s initial cash deposit of $500? Thank you very much for your help.If the reserve requirement is 5 percent, a bank desires to hold no excess reserves, and it receives a new deposit of $10, then this bank A. must increase its required reserves by $10. B. will initially see its total reserves increase by $10.50. C. will be able to make new loans up to a maximum of $9.50. D. All of the above are correct.
- Which of the following is a liability of bank loans reserves securities depositsWhen the reserve requirement changes, which of the following will change for an individual bank? Multiple Choice a.) transactions account balances and lending capacity b.) required reserves, excess reserves, and lending capacity c.) transactions account balances, total reserves, and excess reserves d.) total reserves, required reserves, and excess reservesMatch the term with the definition: What the bank is holding - or it's reserve deposit A. Primary Reserve Occurs if the bank holds more than the required minimum on reserve B. Secondary Reserve The minimum amount of vault cash and deposits at the Federal Reserve district bank that must be held C. Required Reserve A bank's vault cash and it's deposits at the Federal Reserve D. Actual Reserves Treasury bills, notes, certificates, and bonds that will mature in less than a year Excess Reserves
