Ask Question
BusinessBusiness
22 June, 08:20

An FI has $5 million in cash reserves with the Fed in excess of its reserve requirements, $5 million in T-Bills, and a credit line of $10 million to borrow in the repo market. It currently has lent $2 million in the Fed Funds market and borrowed $1 million from the Federal discount window to meet its seasonal needs. What are the bank's total available sources of liquidity

+3
Answers (1)
  1. 22 June, 08:25
    0
    The bank's total available sources of liquidity is $22 million.

    Explanation:

    Sources of liquidity are sources or investments that can be easily converted to cash within a short time.

    Example of these sources of liquidity in this question are cash reserves with the Fed in excess of reserve requirements, T-Bills, a credit line to borrow in the repo market, and lending in the Fed Funds market.

    As result, the bank's total available sources of liquidity can be calculated as follows:

    Total available sources of liquidity = Cash reserves + T-bills + Credit line + Fed Funds lending

    = $5 million + $5 million + $10 million + $2 million

    Total available sources of liquidity = $22 million

    Therefore, the bank's total available sources of liquidity is $22 million.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “An FI has $5 million in cash reserves with the Fed in excess of its reserve requirements, $5 million in T-Bills, and a credit line of $10 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
A bank's assets consist of $1,000,000 in total reserves, $2,100,000 in loans, and a building worth $1,200,000. Its liabilities and capital consist of $3,000,000 in demand deposits and $1,300,000 in capital. Refer to Exhibit 17-2.
Answers (1)
When studying finance or economic, the cost of a decision is also known as a (n)
Answers (2)
The rule that requires revenue be recognized at the time it is earned
Answers (1)
Output for a simple production process is given by Q = 2KL, where K denotes capital, and L denotes labor. The price of capital is $25 per unit and capital is fixed at 8 units in the short run. The price of labor is $5 per unit.
Answers (1)
Which of the following foundation items must be integrated under a concrete cap? A) Isolated column footings B) Wall footings C) Driven piles D) Drilled piers
Answers (1)
New Questions in Business
A nut store normally sells cashews for $4.00 per pound and peanuts for $1.50 per pound. But at the end of the month the peanuts had not sold well, so, in order to sell 40 pounds of peanuts, the manager decided to mix the 40 pounds of peanuts with
Answers (1)
The Bolen Company forecasts that total overhead for the current year will be $8,000,000 and that total machine hours will be 200,000 hours. Year to date, the actual overhead is $10,000,000 and the actual machine hours are 80,000 hours.
Answers (1)
Four trends in the past decade have significantly influenced the landscape of global marketing. one of them is
Answers (1)
Badger Corporation declared a stock distribution to all shareholders of record on March 25 of this year. Shareholders will receive one share of Badger stock for each 10 shares of stock they already own.
Answers (1)
Marketing ethics is most important for advertising agencies. maximizes an organization's positive impact on society. refers to principles and standards that define acceptable conduct in marketing. are laws and regulations that govern marketing.
Answers (2)
Home » Business » An FI has $5 million in cash reserves with the Fed in excess of its reserve requirements, $5 million in T-Bills, and a credit line of $10 million to borrow in the repo market.
Sign Up Forgot Password?