Suppose that JPMorgan Chase sells $100 million in Treasury bills to the Fed. Use T-accounts (balance sheet) to show the immediate effect of this sale on the balance sheets of JP Morgan Chase and the Fed.
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Suppose that JPMorgan Chase sells $100 million in Treasury bills to the
Fed.
Use T-accounts (
sale on the balance sheets of JP Morgan Chase and the Fed.
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- Suppose that a commercial bank’s current quote for transactions involving the United Statesdollar is A$1.3214 – A$1.3298.(a) State the ask and bid prices for the bank. (b) Calculate the bid/ask spread for the bank.(C). A balance sheet for a hypothetical central bank is shown below: Central Bank Balance Sheet in photo Write the new balance sheet if the bank sells $100 worth of foreign bonds for domestic currency.Suppose that the central bank sells government bonds. Use a graph of the money market to show what this does to the value of money and price level.
- Suppose XYZ Bank reports interest-sensitive assets of $670 million and interest-sensitive liabilities of $875 million. What is the bank’s dollar interest-sensitive gap? Its relative interest-sensitive gap and interest-sensitivity ratio?A6 If a bank sells ₺10 million of bonds to the Fed to pay back ₺10 million on the loan it owes, what is the effect on the level of checkable deposits?. National Bank has the following balance sheet (in millions) and has no off-balance-sheet activities. What is the CET1 risk-based ratio? What is the Tier I risk-based capital ratio? What is the total risk–based capital ratio?
- If the Fed sold $6 billion in government securities and the public deposited $3billion in their bank account, by how much would the monetary base change?Unibank also needs to review its off-balance-sheet risk. Using the following balance sheet value of UniBank in market value terms (in millions of dollars) Assets Cash Liquid assets Loans Total assets $ 3 30 55 88 Liabilities and equity Deposits Interbank loan Equity Total liabilities and equity In addition, the bank has contingent assets with $50 million market value and contingent liabilities with $80 million market value. Why do over-the-counter contracts carry more contingent credit risk than exchange-traded contracts? $ 35 5 48 88Which of the following are issued by large commercial banks that can be bought and sold among investors and carry a fixed interest rate? a. Eurodollar CD O b. Certificate of Deposits c. Commercial Papers d. Treasury Bills
- National Bank has the following balance sheet (in millions) and has no off-balance-sheet activities: a)What is leverage ratio? b)What is the Tier I capital ratio? c) What is the total risk-based capital ratio? d) In what capital category would the bank be placed?If reserves in the banking system increase by $1 billion because the Fed lends $1 billion to financial institu- tions, and checkable deposits increase by $9 billion, why isn't the banking system in equilibrium? What will continue to happen in the banking system until equi- librium is reached? Show the T-account for the banking system in equilibrium.The _____ rate is the lending rate at which the largest and most creditworthy corporations borrow money from banks. annualunsecured securedprime