Textbook(s)Kapoor,J. R., Dlabay, L. R., Hughes, R. J., & Hart,M. M.(2015). Personal finance (11th ed.). NewYork,NY: McGraw-Hill Education .wordcount 200 for each questions, APA, Reference and good English and grammar,correct word count and no cover sheet, just answer question. Please usecitation and reference. Reference goes after each question.1. Assume that Bank A receives a primarydeposit of $100,000 and that it must keep reserves of 10 percent againstdeposits.a. Prepare a simple balance sheet of assets and liabilities for the bankimmediately after the deposit is received.b. Assume Bank A makes a loan in the amount that can be safely lent. Show whatthe bank’s balance sheet of assets and liabilities would look like immediatelyafter the loan.c. Assume that a check in the amount of the derivative deposit created in (b)was written and sent to another bank. Show what Bank A’s (the lending bank’s)balance sheet of assets and liabilities would look like after the check iswritten.2. Assume the interest rate on a one-yearU.S. government debt security is currently 9.5 percent compared with a 7.5 percenton a foreign country’s comparable maturity debt security. If the U.S. dollarvalue of the foreign country’s currency is $1.50, what is the expected exchangerate one year from now based on interest rate parity?3. As an advisor to the U.S. Treasury, youhave been asked to comment on a proposal for easing the burden of interest onthe national debt. This proposal calls for the elimination of federal taxes oninterest received from Treasury debt obligations. Comment on the proposal.4. You have been asked to create forecastregarding the shape of next year’s term structure of interest rates. Using thethree term structure theories discussed in Chapter 8, explain what data youwould need and how you would use the data to estimate changes in the termstructure between this year and the next.
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