The Monetary System – Work It Out: Question 1 of 2 Brenda Olivia Adams starts her own bank, called B

The Monetary System – Work It Out: Question 1 of 2 Brenda Olivia Adams starts her own bank, called B

The Monetary System – Work It Out: Question 1 of 2 Brenda Olivia Adams starts her own bank, called BOA. As owner, Brenda puts in $1500 of her own money. BOA then borrows $4000 in a long-term loan from Brenda's roommate, accepts $6000 in demand deposits from her neighbors, buys $1000 of corporate bonds, lends $7000 to local businesses to finance new investments, and keeps the remainder of the bank's assets as reserves at the Fed. b. Now assume an economic downturn causes 10 percent of the local businesses to declare bankruptcy and default on their loans. Calculate the new values for loans, capital, total assets, and total liabilities as a result of the bankruptcies. New value of loans $ New value of capital $ Total assets $ Total liabilities $ The percentage decline in value of assets is The percentage decline in value of capital is

Looking for a similar assignment? Get help from our qualified experts!

Order Now

Related Posts