Figure 103: (Source: Federal Reserve Economic Data, St A) What Is the Bank's Net Worth?
B) If the Federal

question 48

Essay

Figure 10.3: (Source: Federal Reserve Economic Data, St. Louis Federal Reserve)
-Consider the hypothetical bank balance sheet below to answer the following questions.
Table 10.3: Hypothetical Bank Sheet ($ millions) $$\begin{array} { l l | l r } \hline { \text { Column } \mathrm { A } } &{ \text { Column B } } \\\hline \text { Loans } & \$ 6,800 & \text { Deposits } & \$ 7,500 \\\text { Investments } & \$ 3,700 & \text { Short Term Debt } & \$ 300 \\\begin{array} { l } \text { Cash \& } \\ { \text { Reserves } }\end{array} & \$ 1,100 & \text { Long Term Debt } & \$ 1800 \\\hline\end{array}$$
A) What is the bank's net worth?
B) If the reserve requirement is 5 percent, what is the amount of "excess reserves" held by this bank?
C) What is this bank's leverage ratio?
D) If the bank's investments fall by $1,000, what is the bank's equity? Leverage ratio?

• A) What is the bank's net worth?
• B) If the reserve requirement is 5 percent, what is the amount of "excess reserves" held by this bank?
• C) What is this bank's leverage ratio?
• D) If the bank's investments fall by $1,000, what is the bank's equity? Leverage ratio?

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Definitions:

Position Power

The authority or influence conferred by one's rank or official standing within an organization.

Personal Power

The influence or authority an individual has over others, derived from personal attributes or skills, rather than formal position.

Shared Leadership

A dynamic, interactive influence process through which individuals in teams lead one another.

Influence Process

The methods or techniques used to affect the behavior or attitudes of individuals or groups.