When $1 Million Is Deposited at a Bank,the Required Reserve

question 107

Multiple Choice

When $1 million is deposited at a bank,the required reserve ratio is 20 percent,and the bank chooses not to hold any excess reserves but makes loans instead,then,in the bank's final balance sheet

• A)the assets at the bank increase by $800,000.
• B)the liabilities of the bank increase by $1,000,000.
• C)the liabilities of the bank increase by $800,000.
• D)reserves increase by $160,000.

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Definitions:

Value-Based Management

A management approach that ensures corporations are managed consistently on the basis of value creation, focusing on maximizing shareholder value.

Dividend Growth Rate

The annualized percentage rate of growth of a company's dividend payments, indicating how the dividend has grown over a specific period.

Capital Requirements

The minimum amount of capital a bank or financial institution must hold as required by its financial regulator.

Price Per Share

Price Per Share is the amount of money that each share of a company's stock is worth on the stock market at any given time.