Suppose a Bank Has $160,000 in Deposits and a Required

question 15

Multiple Choice

Suppose a bank has $160,000 in deposits and a required reserve ratio of 10 percent.Then required reserves are

• A)$16,000.
• B)$160,000.
• C)$1,600,000.
• D)$1,600.

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Definitions:

Financing Activities

These involve transactions related to raising capital and repaying investors, such as issuing shares and obtaining loans, covered in the cash flow statement.

Cash Dividend

A cash dividend is a payment made by a company out of its earnings to shareholders, usually in the form of cash.

Common Stock

A type of security that represents ownership in a corporation, with rights to vote on corporate matters and receive dividends.

Cash Flow

Cash flow represents the net amount of cash and cash-equivalents being transferred into and out of a business over a specified period.