1. The following table shows the balance sheet for the Senators Bank, which has a...
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Accounting
1. The following table shows the balance sheet for the Senators Bank, which has a ta reserve ratio of 8 percent Assets Reserves Loans Securities Fixed Assets Totals Liabilities/Equit Demand deposits Shareholders' equity $30 000 5 000 $2900 26 000 4200 1900 S35 000 Totals $35 000 a) Is the bank over- or under-reserved? By how much? b) If the bank makes a loan in an amount equal to the excess reserves and the borrower writes a cheque (for the full amount of the loan) to another customer of the bank who then deposits it into the Senators Bank, what will be the new amount of excess reserves? c) If instead, the cheque written by the borrower is cleared against the Senators Bank (the cheque was written to a customer of another bank), what will now be the amount of excess reserves
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