Table 9-5 Bolton Bank: Partial Balance Sheet

question 139

Multiple Choice

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

-Refer to Table 9-5. If the required reserve ratio is 10% and the market interest rate is 8%, what is Bolton Bank's opportunity cost of holding the excess reserves it is currently holding?

• A) $5.6 million
• B) $3.2 million
• C) $0.8 million
• D) 0; Bolton Bank has no excess reserves.

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Definitions:

Sample Standard Deviation

A statistic that measures the dispersion or variability of a sample dataset around its mean.

Sample Mean

The average value of a sample set from a population, often used as an estimate of the population mean.

Standard Deviation

A quantification of the level of diversity or variability in a collection of values, demonstrating how much the values differ from their average.

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The measure of air pressure within a tire, typically measured in pounds per square inch (PSI) or bar, important for vehicle safety and efficiency.