The Monetary System
Assets
Reserves: $300
Loans: $1,500
Securities: $200
Liabilities and Owners' Equity
Deposits: $1,200
Debt: $700
Capital (Owners' Equity): $100
Use the bank balance sheet at right to answer the following questions. Assume debt and deposits remain unchanged in each scenario.
a. What is the leverage ratio?
b. If the value of the bank's assets rises by 2%, what is the new owners' equity?
c. Assume that total assets and owners' equity are as depicted in the balance sheet. What percentage decline in assets would cause owners' equity to fall to zero?
Handsome jack is buying a pony made of diamonds. the price of the pony is p dollars, and jack also has to pay a 25% diamond pony tax. which of the following expressions could represent how much jack pays in total for the pony?