Homework Exercises – 9

With $95 million in deposits, the 0.08 $95 M is required in reserves, or $7.6 million. The bank is short $1.6 million in reserves. To meet any shortfall in the previous question, NewBank will borrow the cash in the federal funds market. Management decides to borrow the needed funds for the remainder of the month (now 29 days). ................
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