University National Bank Balance Sheet

question 90

Multiple Choice

University National Bank Balance Sheet

-The above table has the balance of the University National Bank. All figures are in millions of dollars. The desired reserve ratio is 20 percent. What would be the total increase in loans at this bank if all unplanned reserves were loaned out?

• A) $528 million
• B) $352 million
• C) $232 million
• D) $0

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Definitions:

Option Values

The premium or price of an options contract, determined by factors including the underlying asset's price, strike price, and expiration date.

European Put

A type of put option that can only be exercised at its expiration date, not before.

American Put

An option contract giving the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price before or on a specified date.

Real Option

The choice available to managers regarding business investments, such as expanding, deferring, or abandoning a project, based on changing conditions.