If a Bank Has a Required Reserve Ratio of 30

question 87

Multiple Choice

If a bank has a required reserve ratio of 30 percent,excess reserves of $45,000,000,and deposits of $100,000,000,how much can the bank lend out?

• A) $13,500,000
• B) $30,000,000
• C) $43,500,000
• D) $45,000,000
• E) $145,000,000

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Definitions:

Required Rate Of Return

The minimum percentage return an investor expects to achieve on an investment to consider it worthwhile.

Average Operating Assets

The average value of the assets used in the production or operation of a company over a certain period.

Net Operating Income

The total earnings from a company's operations, after subtracting operating expenses but before interest and taxes.

Performance Evaluation

The process of assessing and reviewing an employee's or organization's work performance and outcomes against established standards or objectives.