# Subhrodip Sengupta -Prin of Finance 100- (3) Problems due tonight

I PROBLEMS

1. Assume that Banc One receives a primary deposit of \$ 1 million. The bank must keep reserves of 20 percent against its deposits. Prepare a simple balance sheet of assets and liabilities for Banc One immediately after the deposit is received.

6. Assume a financial system has a monetary base of \$ 25 million. The required reserves ratio is 10 percent, and there are no leakages in the system. a. What is the size of the money multiplier? b. What will be the systemâ€™s money supply?

9. Assume that last year the Australian dollar was trading at \$. 5527, the Mexican peso at \$. 1102, and the United Kingdom ( British) pound was worth \$ 1.4233. By this year the U. S. dollar value of an Australian dollar was \$. 7056, the Mexican peso was \$. 0867, and the British pound was \$ 1.8203. Calculate the percentage appreciation or depreciation of each of these three currencies between last year and this year.

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