Consider a bank policy to maintain 12% of deposits as reserves. The bank currently has $10 million in deposits and holds $400,000 in excess reserves. What is the required reserve on a new deposit of $50,000?
2. Estimates of unemployment for the upcoming year have been developed as follows:
|
Economy |
Probability |
Unemployment Rate (%) |
|
Bust |
0.15 |
20 |
|
Average |
0.5 |
10 |
|
Good |
0.2 |
5 |
|
Boom |
0.15 |
1 |
What is the expected unemployment rate? The standard deviation?