-In the Balance Sheet for the FBN Bank Above, the Entries

question 284

Multiple Choice

-In the balance sheet for the FBN bank above, the entries are in millions of dollars. If the desired reserve ratio is 10 percent, FBN Bank has desired reserves of

• A) $360 million.
• B) $120 million.
• C) $280 million.
• D) $0.

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Definitions:

Premium

An amount paid over the regular price or the intrinsic value for securities, insurance policies, or other financial products.

Margin Deposits

Funds that an investor must deposit as collateral to borrow from a broker to buy securities, typically used for trading on margin.

Call Options

Financial derivatives that grant the holder the option to purchase stocks or other assets at a predetermined price before the option expires.

Put Options

A financial contract granting the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified timeframe.