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Use the above balance sheets to answer the following questions. The questions are unrelated with...

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Finance

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Use the above balance sheets to answer the following questions. The questions are unrelated with each other.

  1. If the required reserve is 10%, what is the maximum deposit outflow that each bank can handle before it has to change its asset holdings?

2.If the capital requirement is 8% of risk-adjusted assets, what is the minimum capital that each bank needs to maintain the current balance sheet?

3.If both banks suffer a loss of $3 m in the portfolio of commercial loans, which bank will be undercapitalized? And, by how much?

4What can the bank do to meet the capital requirement?

First National Bank Risk-AdjustedAssets

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