If Bank of Mateer Has a Required Reserve Ratio of 40

question 163

Multiple Choice

If Bank of Mateer has a required reserve ratio of 40 percent and there is $100,000 in deposits,what is the maximum amount of money it can loan?

• A) $100,000
• B) $15,000
• C) $40,000
• D) $60,000
• E) $0

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Definitions:

Total Asset Turnover

A financial metric that measures a company's efficiency in using its assets to generate sales or revenue.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue; often referred to as the bottom line.

Average Total Assets

A financial metric calculated by averaging a company's total assets over a certain period, used to measure a company's asset utilization efficiency.

Held-to-maturity Securities

Debt securities that a company intends and is able to hold until they mature.