Table 29-3

question 144

Multiple Choice

Table 29-3. An economy starts with $50,000 in currency. All of this currency is deposited into a single bank, and the bank then makes loans totaling $45,750. The T-account of the bank is shown below.
-Refer to Table 29-3. The bank's reserve ratio is

• A)17.5 percent.
• B)8.5 percent.
• C)91.5 percent.
• D)100 percent.

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Definitions:

Bond Discount Amortized

The process of gradually writing off the discount on bonds payable over the life of the bonds, affecting interest expense on the income statement.

Bond Premium Amortization

The process of gradually expensing the premium paid over the par value of a bond over its life.

Effective Yield

The total yield of a bond once all charges are factored in, expressed as an annual percentage.