Reference: Ref 15-2 (Table: Multiple Deposit Expansion) for the Multiple

question 74

Multiple Choice

Reference: Ref 15-2 (Table: Multiple Deposit Expansion) For the multiple deposit expansion process described in this table, what is the maximum amount of loans that the Third National Bank can make if it decides to hold 1 percent of deposits as excess reserves?

• A) $338,560
• B) $30,470.40
• C) $308,089.60
• D) $311,475.20

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Definitions:

Pension Plan

A pension scheme in which an employer is obliged to contribute to a fund allocated for an employee's future benefit.

Plan Contribution

Money added to a retirement or pension plan, either by individuals or employers, to save for the future.

Actuarially Determined

Calculated using actuaries' methods and assumptions, typically in the context of pension plans and insurance.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows or investments.