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Construct a bank balance sheet with the following items: reserves, deposits, loans, securities, capital, and debt. Choose values so that the reserve-deposit ratio is 10 percent and the leverage ratio is 10. Give an example of a change in asset values that would push bank capital to zero. What happens when bank capital is gone?
Budgeting
The process of creating a plan to spend your money, forecasting future income and expenses over a specified period.
Activity Variance
The difference between planned activity levels or costs and actual activity levels or costs.
Other Expenses
Expenses not directly tied to the production of goods or services, such as administrative and selling expenses.
Budgeting
The practice of formulating a budget to dictate how you’ll use your money, identifying prospective financial aims and the approaches to attain them.
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