A Bank Has an Average Balance of Transactions Accounts, August

question 113

Multiple Choice

A bank has an average balance of transactions accounts, August 10 to 23, of $824.46 million.The average balance in the cash account is $42.014 million over this period.The bank is carrying forward a deficit of $1.276 million from the last reserve period.The rules require no reserves to be maintained for the first $8.5 million, 3 percent for amounts between $8.5 million and $45.8 million, and 10 percent thereafter. What is the gross reserve requirement?

• A)$74.653 million.
• B)$78.985 million.
• C)$76.747 million.
• D)$72.461 million.
• E)$77.866 million.

---

Definitions:

Book Value

The net value of a company's assets minus its liabilities, often used to determine the potential value of a company if it were to be liquidated.

Financial Distress

An instance wherein a business faces challenges or fails to satisfy its monetary debts to creditors.

Trade-off

The process of sacrificing one quality, quantity, or property to gain another.