Mbank has deposit liabilities of $300 million. it only keeps the minimum cash reserves required by law of 20%. its annual costs (wages, rent, utilities, etc.) are $5 million. what is mbank’s profit under the following circumstances: (a) (2pts) it charges 4% annual interest on its loans and pays 1% annual interest on its deposits. (b) (2 pts) it charges 4% annual interest on its loans, but in order to meet the market competition it raises its interest rate on deposits to 2%. (c) (2 pts) the interest rates are as in part (a) above, but due to uncertain economic conditions, mbank decides to hold an additional 5% in excess reserves.
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Business, 19.07.2019 19:10, rosetoheart2
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