Exhibit 15-1 Balance Sheet of First Iliad State Bank

question 112

Multiple Choice

Exhibit 15-1 Balance sheet of First Iliad State Bank
In Exhibit 15-1, if the required reserve ratio is raised to 15 percent, First Iliad State will have to convert loans worth:

• A)$9,000,000 to required reserves.
• B)$1,500,000 to required reserves.
• C)$500,000 to required reserves.
• D)$1,000,000 to required reserves.
• E)$450,000 to required reserves.

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Definitions:

Target Cost

The estimated price for a product or service that is determined by subtracting a desired profit margin from the competitive market price.

Profit Margin

The ratio or percentage of profit to sales, reflecting the efficiency with which a company or business unit generates income relative to its revenue.

Competition-Based Method

A method of price setting based on the price offered by competitors.

Price-Setting Methods

Various strategies and techniques businesses use to determine the selling price of their goods or services.