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Figure 103: (Source: Federal Reserve Economic Data, St A) What Is the Bank's Net Worth?
B) If the Federal

Question 101

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Figure 10.3:  Figure 10.3:   (Source: Federal Reserve Economic Data, St. Louis Federal Reserve) -Consider the hypothetical bank balance sheet below to answer the following questions. Table 10.3: Hypothetical Bank Sheet ($ millions)  \begin{array} { l l | l r }  \hline  { \text { Column } \mathrm { A } } &{ \text { Column B } } \\ \hline \text { Loans } & \$ 6,800 & \text { Deposits } & \$ 7,500 \\ \text { Investments } & \$ 3,700 & \text { Short Term Debt } & \$ 300 \\ \begin{array} { l }  \text { Cash \& } \\  { \text { Reserves } } \end{array} & \$ 1,100 & \text { Long Term Debt } & \$ 1800 \\ \hline \end{array}   A) What is the bank's net worth? B) If the reserve requirement is 5 percent, what is the amount of  excess reserves  held by this bank? C) What is this bank's leverage ratio? D) If the bank's investments fall by $1,000, what is the bank's equity? Leverage ratio?  (Source: Federal Reserve Economic Data, St. Louis Federal Reserve)
-Consider the hypothetical bank balance sheet below to answer the following questions.
Table 10.3: Hypothetical Bank Sheet ($ millions)  Column A Column B  Loans $6,800 Deposits $7,500 Investments $3,700 Short Term Debt $300 Cash &  Reserves $1,100 Long Term Debt $1800\begin{array} { l l | l r } \hline { \text { Column } \mathrm { A } } &{ \text { Column B } } \\\hline \text { Loans } & \$ 6,800 & \text { Deposits } & \$ 7,500 \\\text { Investments } & \$ 3,700 & \text { Short Term Debt } & \$ 300 \\\begin{array} { l } \text { Cash \& } \\ { \text { Reserves } }\end{array} & \$ 1,100 & \text { Long Term Debt } & \$ 1800 \\\hline\end{array}
A) What is the bank's net worth?
B) If the reserve requirement is 5 percent, what is the amount of "excess reserves" held by this bank?
C) What is this bank's leverage ratio?
D) If the bank's investments fall by $1,000, what is the bank's equity? Leverage ratio?

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a. Net worth = Assets - Liabilities = $1...

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