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3 years ago

If total deposits in bank A total $15 million and the required-reserve ratio is 10 percent, than excess reserves equal:_______

Business

1 answer:

victus00 [196]3 years ago

7 0

Answer:

$13.5 million

Explanation:

Fractional Banking System- This is banking system where banks are required by the central banking authority to keep a certain percentage of their total deposit as the minimum reserve which they cannot lend out.

The idea behind this requirement is to help manage liquidity risk- a situation where a bank does not have enough cash to meet its deposit customers demand.

Required-reserve ratio: The minimum percentage that banks are required to keep as reserve is known as the required-reserve ratio. In this question, it is given as 10%. Multiply this ratio by the total deposit and you will get the required reserve in dollar amount.

Therefore the required reserve for this bank = 10% ×$15 million= $1.5 million

Excess reserve; Excess reserve is the balance of the total deposit over and above the required reserve. The bank can lend and create loan asset from this balance.

It is calculated as = Total deposit - Required reserve

So we apply this to our question

Excess reserve = $15 million - (10% × $15 million)

= $15 million - $1.5 million

= $13.5 million

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If d0 = $1.75, g (which is constant) = 3.6%, and p0 = $40.00, what is the stock's expected total return for the coming year?

Nookie1986 [14]

Answer:

The answer is "a. 8.13%".

Explanation:

Given that;

d0 = $1.75

p0 = $40.00

g = 3.6% = 0.036

By using the formula;

Price of the stock = (Dividend this year)(1+g) ÷ (r - g)

By putting the values;

40 = (1.75)(1+0.036) ÷ (r - 0.036)

r - 0.036 = (1.75)(1.036) ÷ 40

r - 0.036 = 1.813 ÷ 40

r - 0.036 = 0.045325

r = 0.045325 + 0.036

r = 0.081325 = 0.081325 x 100

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3 years ago

Read 2 more answers

The unlevered cost of capital is: Group of answer choices the cost of preferred stock for a firm with equal parts debt and equit

Dennis_Churaev [7]

Answer: The cost of capital for a firm with no debt in its capital structure.

Explanation:

Leverage in finance refers to the use of debt. Unlevered capital therefore would refer to capital that is without debt which means that an unlevered cost of capital is one with no debt in its capital structure.

Companies with such a capital structure derive their capital 100% from Equity and as such do not pay interest. This means however, that they will not benefit from the tax shields that interest payments offer.

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2 years ago

On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK Corporation. On that date, the stock

butalik [34]

Answer:

Taxes on January 1, year 1= $1400

Taxes on Dec 31, year 4=$3300

Explanation:

The question relates to 'EQUITY GRANT', which is some sort of compensation given to somebody, especially/specifically to employees of an entity provided that certain conditions/vesting requirements are satisfied by the employee.

Now on January 1, year 1 Dave has received 1000 shares, for him the shares received is treated is income for Dave, as the shares are being offered against certain services rendered by Dave to RRK corporation. So on January 1 Dave would record income and pay income tax as follows:

Value of shares on Jan 1/ income= 1000×$7

Value of shares on Jan 1/ income= $7000

Lets assume income tax is 20% and marginal tax rate is 10%, the tax consequences would be as follows:

TAXES = $7000×20%

TAXES = $1400

There will be no tax consequences at the vesting date and at the end of year 4 (the date when he sells them) there will be tax consequences of $4000.

At year 4 = 1000×$40

Amount realized= $40000 -$7000

Taxes at marginal rate= $33000×10%

Taxes at marginal rate= $3300

(Note: $7000 is subtracted because it's already present in $40000).

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3 years ago

Which of the following would be a helpful tool to help nations, communities, and families compensate for scarcity while trying t

Kryger [21]

A budget allows nations, communities, and families to ensure they have what they need while accounting for scarcity. A budget allows one to take scarcity into account and to prioritize what is wanted and needed, and to allocate money or resources in a way that reflects these priorities.

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3 years ago

After examining the records of Theta Company for the month of October, the following information is obtained: Beginning cash bal

melisa1 [442]

Answer:

the surplus of the cash is $21,000

Explanation:

The computation of the cash surplus (deficiency) for the month of October is given below:

Cash surplus is

= opening balance + cash receipt - cash payment - minimum cash balance

= $2,700 + $56,000 - $36,000 - $1,000

= $21,000

hence, the surplus of the cash is $21,000

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2 years ago