Scenario 11-2 A Bank's Assets Consist of $1 000 000 in Total

question 103

Multiple Choice

Scenario 11-2
A bank's assets consist of $1 000 000 in total reserves, $2 100 000 in loans, and a building worth $1 200 000. Its liabilities and capital consist of $3 000 000 in demand deposits and $1 300 000 in capital.
-Refer to Scenario 11-2.If the desired reserve ratio is 10 percent,what is the level of the bank's excess reserves and how much could it loan out as a result?

• A)Excess reserves are $700 000, and it could loan out $7 000 000.
• B)Excess reserves are $300 000, and it could loan out $3 000 000.
• C)Excess reserves are $700 000, and it could loan out $700 000.
• D)Excess reserves are $300 000, and it could loan out $300 000.

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Definitions:

Cross-Cultural Miscommunication

A situation where there is a misunderstanding or misinterpretation of information due to differences in cultural background or practices.

Cultural Competence Skill Areas

Specific abilities that enable individuals to effectively interact, communicate, and operate across different cultural contexts, enhancing mutual understanding and respect.

Self-Awareness

The conscious knowledge of one's own character, feelings, motives, and desires.

Adaptation

The process of change by which an organism or species becomes better suited to its environment.