Suppose that a bank holds $15m in treasury bonds $10m in reserves $30m of checkable deposits $20m of time deposits $6m of capital How much loan does the bank have if we know it doesn't have any other assets or liabilities Suppose that checkable deposits and reserves pay 0 interest The interest rate on treasuries is 3% The loan pays 7% Time deposits pay 5% How much profit does the bank make? What is the bank's return on assets? 3.2% 2.9% 3.7% 2.6%
Suppose that a bank holds $15m in treasury bonds $10m in reserves $30m of checkable deposits $20m of time deposits $6m of capital How much loan does the bank have if we know it doesn't have any other assets or liabilities Suppose that checkable deposits and reserves pay 0 interest The interest rate on treasuries is 3% The loan pays 7% Time deposits pay 5% How much profit does the bank make? What is the bank's return on assets? 3.2% 2.9% 3.7% 2.6%
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter27: Money And Banking
Section: Chapter Questions
Problem 30P: A bank has deposits of 400. It holds reserves of 50. It has purchased government bonds worth 70. It...
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Question
Suppose that a bank holds
$15m in treasury bonds
$10m in reserves
$30m of checkable deposits
$20m of time deposits
$6m of capital
How much loan does the bank have if we know it doesn't have any other assets or liabilities
Suppose that checkable deposits and reserves pay 0 interest
The interest rate on treasuries is 3%
The loan pays 7%
Time deposits pay 5%
How much profit does the bank make?
What is the bank's return on assets?
- 3.2%
- 2.9%
- 3.7%
- 2.6%
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