The Minimum Daily Average Reserve Requirement Is Computed by

question 136

Multiple Choice

The minimum daily average reserve requirement is computed by

• A)multiplying the reserve ratio by the daily closing deposit balance.
• B)multiplying the reserve ratio by the daily average closing deposit balance.
• C)dividing the reserve ratio by the daily average closing deposit balance.
• D)dividing the reserve ratio by the daily closing deposit balance.
• E)adding up daily closing deposit balances and dividing by 14.

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Definitions:

Demand Uncertainty

This refers to the unpredictability or variation in the demand for products or services in the market.

Safety Inventory

Extra stock kept on hand to prevent stockouts due to variable demand and lead times.

Safety Inventory

Extra inventory kept on hand to protect against uncertainties in demand or supply.

Product Availability

The extent to which goods or services can be purchased or accessed as desired by customers at a given time.