Use the information given in Great Lakes National Bank's balance sheet to answer the following questions. Assets Bank's Balance Sheet Liabilities and Owners' Equity Deposits $1,400 Reserves $175 Loans $700 Debt Securities $875 Capital (owners' equity) $225 $125 Suppose the owners of the bank contribute an additional $200 from their own funds and use i to buy securities in the name of the bank. This would increase the securities account and the account.

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter25: Money, Banking, And The Federal Reserve System
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Use the information given in Great Lakes National Bank's balance sheet to answer the following questions.
Assets
Reserves
Loans
Securities
Bank's Balance Sheet
$175
$700
$875
Liabilities and Owners' Equity
Deposits
$1,400
Debt
Capital (owners' equity)
$225
$125
Suppose the owners of the bank contribute an additional $200 from their own funds and use it to buy securities in the name of the bank. This would
increase the securities account and
the
account.
This would also bring the leverage ratio from its initial value of
to a new value of
Which of the following statements regarding the capital requirement is true? Check all that apply.
Its intended goal is to protect the interests of those who hold equity in the bank.
It specifies a minimum leverage ratio for all banks.
Its intended goal is to protect the interests of the depositors.
Transcribed Image Text:Use the information given in Great Lakes National Bank's balance sheet to answer the following questions. Assets Reserves Loans Securities Bank's Balance Sheet $175 $700 $875 Liabilities and Owners' Equity Deposits $1,400 Debt Capital (owners' equity) $225 $125 Suppose the owners of the bank contribute an additional $200 from their own funds and use it to buy securities in the name of the bank. This would increase the securities account and the account. This would also bring the leverage ratio from its initial value of to a new value of Which of the following statements regarding the capital requirement is true? Check all that apply. Its intended goal is to protect the interests of those who hold equity in the bank. It specifies a minimum leverage ratio for all banks. Its intended goal is to protect the interests of the depositors.
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