a.) The current reserve ratio is given by the fraction of the bank's total deposits held in reserves.
Given that the bank's total deposits is $7,200 and the reserves is $1,600, the current reserve ratio is given by:
[tex] \frac{1,600}{7,200} \times100\%=22\%.[/tex]
b.) The loan portfolio is given by (total deposit - reserves) / total deposits
Thus, the loan portfolio of the given bank is given by:
[tex] \frac{7,200-1,600}{7,200} \times100\%= \frac{5,600}{7,200} \times100\% \\ \\ =78\%[/tex]
