If a Bank Has a Total of $80,000 in Deposits

question 113

Multiple Choice

If a bank has a total of $80,000 in deposits and has made three loans in the amounts of $10,000, $20,000, and $30,000, what is this bank's reserve ratio (assuming it has no other deposits or made any other loans) ?

• A) 20%
• B) 25%
• C) 60%
• D) 75%

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Definitions:

Stockholders

Individuals or entities that own shares in a corporation, giving them ownership interest.

Limited Risk

Exposure to a relatively small possibility of loss or less severe consequences in an investment or business activity.

Assets

Resources owned by a business or individual that have economic value and can provide future benefits.

Supplies

Items used in the operation of a business or part of inventory not yet sold.