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3 years ago

When a commercial bank borrows additional reserves from another bank, it pays which interest rate?

Business

2 answers:

oksano4ka [1.4K]3 years ago

8 0

Answer:

Federal funds rate

Explanation:

Federal funds rate can be described as a target interest rate which is set by the Federal Open Market Committee (FOMC) and it is the interest rate at which excess reserves of commercial banks are lent to and borrowed from each other overnight.

The law requires that commercial banks must maintain certain percentage of their deposits in their account with Federal Reserve bank as a reserve. When there is an excess of money above the required level in the reserve of some banks, the excess can be lent by those banks to other banks that have shortfalls. The interest rate that is paid by the borrowing banks is the federal fund rate.

Harman [31]3 years ago

8 0

Answer - Federal Funds Rate

Explanation;

The Fed sets a reserve requirement that banks must keep with them out of their deposits. Everyday they will have to meet this reserve requirement. When they do not, they have the option to borrow overnight from another bank that has excess reserves.

The rate that they will borrow these excess reserves at is the Federal Funds Rate. This rate is set by the Federal Open Market Committee (FOMC) of the Fed which does so based on the economic condition of the nation.

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SME Company has a debt-equity ratio of .57. Return on assets is 7.9 percent, and total equity is $620,000. a. What is the equity

PtichkaEL [24]

Answer:

(i) 1.57

(ii) 12.40%

(iii) $76,898.60

Explanation:

Debt-equity ratio = debt/equity

Hence debt= 0.57 equity

= (0.57 × 620000)

= $353,400

Total assets = debt + equity

= (353400+620000)

= $973400

1. Equity multiplier = Total assets ÷ Equity

= $973,400 ÷ 620,000

= 1.57

3. ROA = net income ÷ Total assets

net income = ($973,400 × 0.079)

= $76,898.60

2. ROE = net income ÷ Total equity

= $76,898.60 ÷ 620,000

= 12.40%(Approx).

7 0

3 years ago

1. Descriptive research is conducted for all of the following reasons except ________. a. to describe the characteristics of rel

Softa [21]

Answer: c. To understand which variables are the cause and which variables are the effect of a phenomenon

Explanation:

The options include:

a. To describe the characteristics of relevant groups, such as consumers, salespeople, organizations, or market areas

b. to determine the degree to which marketing variables are associated

c. to understand which variables are the cause and which variables are the effect of a phenomenon

d. to determine the perceptions of product.

Descriptive research simply refers to a research type that is used in the description of a population that the researcher is studying.

It simply answers questions such as when, what or how in the research. The subject of the research is being described here.

From the options given, we should note that the descriptive research isn't conducted to understand which variables are the cause and which variables are the effect of a phenomenon.

5 0

2 years ago

A corporation is issuing 5,000,000 shares of stock at a public offering price of $13 per share. The manager of the underwriting

pentagon [3]

Answer:

$12.20 per share for a total of $61,000,000

Explanation:

Calculation to determine how much will the managing underwriter's fee will total:

First step is to calculate the underwriting risk. Amount

Underwriting risk=($0.65 - $0.40)

Underwriting risk=$0.25

Second step is to calculate The total spread is

Total spread=($0.15+ $0.25 +$0.40 )

Total spread=$0.80

Now let determine the amount The issuer will receive and the Total

Amount received = ($13.00 - $0.80)

Amount received=$12.20 per share

Total= ($12.20 x 5,000,000 shares)

Total = $61,000,000

Therefore When the issue is completely sold, the managing underwriter's fee will total:$12.20 per share for a total of $61,000,000

8 0

3 years ago

In february 1898, what ship exploded in havana harbor with a loss of nearly 270 lives?

Dmitriy789 [7]

The battleship Maine

4 0

3 years ago

Read 2 more answers

Which of the following is not one of the steps for recognizing revenue? Identify the performance obligations of the contract. Id

9966 [12]

Answer:

The answer is letter "D": Estimate the total transaction price of the contract based on the sum of the stand-alone selling prices of the goods.

Explanation:

There are five steps for revenue recognition established by the Financial Accounting Standards Board (FASB) which are: Identifying the contract with a customer; Identifying the performance obligations in the contract; Determining the transaction price; Allocating the prices to the performance obligations and; Recognizing revenue.

In that sense, estimating the total transaction price of the contract based on the sum of the stand-alone selling prices of the goods has nothing to do with it.

4 0

3 years ago