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:

Initial Cost

The total expense incurred to acquire an asset or start a project, including all relevant expenses.

Cash Inflows

Cash inflows represent the money received by a business from its operational, financial, and investment activities, contributing to its total cash pool.

Rate of Interest

The percent of principal charged by the lender for the use of its money or the rate earned on invested capital.

Initial Investment

The upfront cash outlay required to start a project or investment.