Use the information presented in Southwestern Mutual Bank's balance sheet to answer the following questions.
Bankâs Balance Sheet
Assets Liabilities and Owners' Equity
Reserves $200 Deposits $1,600
Loans $800 Debt $250
Securities $1,000 Capital (owners' equity) $150
Suppose a new customer adds $100 to his account at Southwestern Mutual Bank, which the owners of the bank then use to make $100 worth of new loans. This would increase the loans account and the account.
This would also bring the leverage ratio from its initial value of to a new value of.
Which of the following do bankers take into account when determining how to allocate their assets? Check all that apply.
The riskiness of each asset
The total value of liabilities
The size of the monetary base
+4
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