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denis23 [38]
4 years ago
10

Suppose again that the Third National Bank has reserves of $20,000 and checkable deposits of $100,000. The reserve ratio is 20 p

ercent. The bank now sells $5,000 in securities to the Federal Reserve Bank in its district, receiving a $5,000 increase in reserves in return. What level of excess reserves does the bank now have? By what amount does your answer differ (yes, it does!) from the answer to question 3?
Business
1 answer:
DedPeter [7]4 years ago
3 0

Answer:

$5,000

Explanation:

Data provided in the question:

Reserves balance = $20,000

Checkable deposits = $100,000

Reserve ratio = 20 percent

Selling amount for securities = $5,000

Increase in reserves = $5,000

Now,

New reserve balance = Reserves balance + Increase in reserves

= $20,000 + $5,000

= $25,000

Required  reserve = 20% of Checkable deposits

= 20% of $100,000

= $20,000

Therefore,

Excess reserves = Actual reserve - Required reserve

= $25,000 - $20,000

= $5,000

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Answer:

$9,813.54

Explanation:

The face value of the T-bill is $10,000

Return of 1.9%

P= $10,000/1.019

= $9,813.54

Therefore the price you would expect a 6-month maturity Treasury bill to sell for is

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8 0
3 years ago
Wilma, Betty, and Fred are partners who share income and losses in a 5:3:2 ratio. Wilma decides to retire from the partnership w
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Answer:

<u>debited</u>

Explanation:

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As per the given information, Wilma is paid $45000 in cash. The journal entry in this case would be:

Wilma's Capital A/C                                    Dr.  $45000

    To Cash A/C                                                                $45000

For the remaining balance, Wilma shall be paid in cash as follows,

Wilma's Capital A/C                                    Dr. $5000

     To Cash A/c                                                            $5000

(Being settlement of a retiring partner's capital account being recorded)

3 0
3 years ago
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<span>C. Fixed Costs. Fixed costs are incurred regardless of the number of units of a product are produced or sold on a given period. Fixed costs are expenses incurred and remain unchanged within a relevant period. These costs are fixed in relation to the quantity of production for a certain period.</span>

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3 years ago
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Answer:

B. Equity Capital

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