--%>
Assignment Help - homework help

Question on balance sheet of Yukon Bank

Assume the Yukon Bank has the given simplified balance sheet. The reserve ratio is 6.25 %.

16_simplified balance sheet.png

Determine the maximum amount of new loans which this bank can make? Illustrates in column 1 how the bank's balance sheet will seem after the bank has loaned this added amount.

E

Expert

Verified

Desired reserves are 6.25% of $100,000 will be $6,250.

Actual reserves is $22,000

Desired reserves is $ 6,250

Excess reserves is $15,750

The maximum amount of new loans the bank may make =$15,750. The new balance sheet is illustrated in column 1 above.

 

   Related Questions in Finance Basics

  • Q : Explain compound interest Normal 0

    Normal 0 false false

  • Q : Demand for small automobiles Normal 0

    Normal 0 false false

  • Q : Four major phases of the business cycle

    Normal 0 false false

    		•
  • Q : Advantages of corporation in countries

    Describe some primary advantages while a corporation has operations in countries other than its home country? Explain risks? Foreign operations may decrease a company's labour or material costs, and may raise its sales. Risks comprise possible

    		•
  • Q : Financing costs in capital budgeting

    How are financing costs incorporated generally into the capital budgeting analysis procedure? Usually financing costs are captured in the discount or hurdle rate while doing NPV or IRR analysis. Usually the operating cash flows do not comprise

    		•
  • Q : Describe difference between business

    Describe difference between business risk and financial risk?Business risk refers to the uncertainty company hold regarding to its operating income (also termed as earnings before interest & taxes or EBIT). Business risk is brought onto sale

    		•
  • Q : Effect of bank charges discount

    What happens while a bank charges discount interest on a loan? While a bank charges discount interest on a loan the required interest payment is subtracted through the loan proceeds at the time the loan is made. It makes the effective interest

    		•
  • Q : Why do analysts compute financial ratios

    Why do analysts compute financial ratios? Ratios are comparative measures.  Since the ratio illustrates relative value, they let financial analysts to compare information which could not be compared in its raw form.  For instance, rati

    		•
  • Q : State Section 1.80 Section 1.80 : The

    Section 1.80: The section of Budget Act which comprises the periods of accessibility for Budget Act appropriations.

    		•
  • Q : Financial crisis of India during 1997 I

    I have to explain Financial crisis of India during 1997. Can someone help me in this question ?

    		•