Table 9-5 Bolton Bank: Partial Balance Sheet

question 218

Multiple Choice

Table 9-5
Bolton Bank: Partial Balance Sheet
(All figures in $ million)

-Refer to Table 9-5. The required reserve ratio is 10%. What is the amount of Bolton Bank's excess reserves?

• A) $30 million
• B) $70 million
• C) $100 million
• D) zero

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Definitions:

Cheque Clearing

The process by which banks settle transactions made by cheques, transferring money from the payer's account to the payee's account.

Short-term Financing

Funding obtained to meet immediate to short-term (up to one year) financial obligations and operational expenditures of a business.

Cash Surpluses

Excess cash that a company generates beyond its needs, which can be used for investment, dividends, or to strengthen the balance sheet.

Marketability Risk

The risk that an asset cannot be sold quickly in the market without impacting its price significantly.