A Bank Has $132,000 in Excess Reserves and the Required

question 26

Multiple Choice

A bank has $132,000 in excess reserves and the required reserve ratio is 11 percent.This means the bank could have __________ in checkable deposit liabilities and __________ in (total) reserves.

• A) $4,000,000; $590,000
• B) $1,000,000; $110,000
• C) $5,000,000; $5,869,000
• D) $4,700,000; $869,000

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Definitions:

Market Values

Refers to the current price at which an asset, security, or commodity can be bought or sold in the marketplace.

Promissory Note

A Promissory Note is a financial instrument that contains a written promise by one party to pay another party a definite sum of money, either on demand or at a specified future date.

Promissory Note

Definition: A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.

Promissory Note

A financial instrument involving a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.