1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Dovator [93]
3 years ago
5

Suppose that initially a bank has excess reserves of $800 and the reserve ratio is 30%. Then Andy deposits $1,000 of cash into h

is checking account and the bank lends $600 to Molly. That bank can lend an additional:
A) $100.
B) $800.
C) $900.
D) $300
Business
1 answer:
ratelena [41]3 years ago
3 0

Answer:

excess reserves after lending  = $900

so correct option is C) $900

Explanation:

given data

reserves = $800

reserve ratio = 30%

deposits = $1,000

bank lends = $600

to find out

That bank can lend an additional

solution

first we get required reserves from new deposit that is express as

required reserves  = deposit × reserve ratio      ......................1

put here value

required reserves  = $1000 × 30%

required reserves  = $300

and

now excess reserves from new deposits will be  

excess reserves = deposits - required reserves     .......................2

put here value

excess reserves = $1000 - $300

excess reserves  = $700

and

total excess reserves  will be here

total excess reserves = old excess reserves + new excess reserves     ...........3

put here value

total excess reserves =  $800 + $700

total excess reserves = $1500

so that

excess reserves after lending is here express as

excess reserves after lending  = excess reserves - amount given to Molly   ..........................4

put here value

excess reserves after lending  = $1500 - $600

excess reserves after lending  = $900

so correct option is C) $900

You might be interested in
The expected rates of return on portfolios A and B are 11% and 14%, respectively. The beta of A is 0.8 and the beta of B is 1.5.
Zigmanuir [339]

Answer:

Portfolio B has a higher return but more volatile stocks. However it depends on how the individual can tolerate risks.

Explanation:

Expected return= free return + Beta (Expected rate of return – risk free rate)

Portfolio A

6%+ +.8*6%

= 6%+4.8%= 10.8%

Portfolio B

6%+1.5(6%)

6%+9%= 15%

It depends on different factors. Portfolio B has a higher return but more volatile stocks. However it depends on how the individual can tolerate risks.

4 0
3 years ago
The "real burden" of the debt is directly related to
goldenfox [79]
Hi.

I think the answer is the idea of opportunity cost.

~
5 0
3 years ago
While everyone's personal financial goals will be unique to their situation, the means for achieving them will be similar. What
MrRa [10]

Answer:

increase their savings

Explanation:

Saving is the action of putting aside a portion of income in a safe place instead of spending.  It is a technique that firms and individuals use to achieve their financial objectives. Consistent saving for a duration of time helps accumulates a substantial amount of money that can be used to actualize financial objectives.

While savings is not the financial objective, it is a means to achieve the actual goal. For Example, if one goal is to own a home or a car, they start saving for the down-payment. Saving helps achieve their long term goals.

7 0
2 years ago
We respect our employees and value their diversity" is an example of a statement you are most likely to find in the organization
Julli [10]

Answer: Mission

Explanation:

 The organizational mission is one of the type of approach that is used for reflecting the various types of products and the services information and also it important values.

The main main objective of the organizational mission is that it helps in providing the various types of company statement based on its the organizational specific goals and the values.

 According to the given question, the mission is one of the organizational factor that helps in value the employees and also respect their specific diversity.  

 Therefore, Mission is the correct answer.

3 0
2 years ago
Larry holds 2,000 shares of common stock in a company that only has 20,000 shares outstanding. The company's stock currently is
weeeeeb [17]

Answer:

We have to find the value of Larry's investement before and after the issue of new shares, to see if Larry's worries are justified.

The current value of Larry's investment is:

2,000 x $41.00 = $82,000

To find the value of Larry's investment if the new shares are issued, we use the following formula:

Investment = ¨[[(Oustanding shares x price per share) + (New issue of shares x price per share)]/ Outsanding shares + new issue] x No. of shares held

Investment = [[(20,000 x 41.00) + (5,000 x 32.80)] / 20,000 + 50,000] x 2,000

Investment = 39.36 x 2,000

Investment = $78,720

Thus, if the new shares were issued, Larry's investment value in the company would fall from $82,000 to $78,720, confirming his reasons to be worried.

8 0
3 years ago
Other questions:
  • DEF Corporation had two issues of ordinary preferred stock with a $100 par value traded on the NYSE. One issue paid $5.56 annual
    13·1 answer
  • If the real output is at a near maximum level, which of the following should be considered?
    5·1 answer
  • Cave Hardware's forecasted sales for April, May, June, and July are $150,000, $250,000, $100,000, and $290,000, respectively. Sa
    10·1 answer
  • Which of the following statements about the insurance verification process is a FALSE statement? A) Directly affects payment del
    10·1 answer
  • A(n) ________ occurs when the purchasing agent orders additional units of products that have previously been purchased.
    5·1 answer
  • Which of the following journal entries is recorded correctly and in the basic format? a. Salaries and Wages Expense 550, Cash 1,
    10·1 answer
  • A normal cost system applies overhead to jobs ________.
    10·1 answer
  • Darren has borrowed $100$ clams from ethan at a $10\%$ simple daily interest. meanwhile, fergie has borrowed $150$ clams from ge
    5·1 answer
  • What is an an intrinsic reward?
    14·1 answer
  • The Midwest Division of Grainger Company has investment center average invested assets of $200,000 and investment center income
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!