If a Check Is Written for the Full Amount of a Derivative

question 49

Multiple Choice

If a check is written for the full amount of a derivative deposit created by a bank loan and then is sent to a bank in another city for deposit

• A) the lending bank would lose all of its excess reserves.
• B) the lending bank would still have reserves to lend.
• C) the full amount would be added to the receiving bank's excess reserves.
• D) the receiving bank would lose excess reserves.

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