Assessments of equivalent inertia and primary frequency regulation (PFR) are critical for evaluating frequency stability in modern power systems. Traditional methods typically aggregate the contributions of all generation units or rely on system identification during disturbances. However, these methods may yield inaccurate or incomplete results in systems with a high penetration of inverter-based resources (IBRs), as IBRs may reach their power reserve limits (PRLs) and fail to provide the expected frequency support. To overcome this limitation, this paper proposes an assessment method of equivalent inertia and PFR of power systems considering PRLs of IBRs. In addition, dead zones and control delays are incorporated to further enhance the accuracy of the assessment. Based on the assessment results, an optimal parameter-setting approach for equivalent inertia and PFR is then developed. Notably, the theoretical optimal settings are generally difficult to achieve in practice, implying that conventional parameter settings may lead to significantly lower equivalent inertia than expected. The effectiveness of the proposed method is validated through time-domain simulations.