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

question 162

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 bank desires to keep reserves equal to one-third of deposits,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 $2 100 000.
• B)Excess reserves are $300 000, and it could loan out $300 000.
• C)Excess reserves are $300 000, and it could loan out $900 000.
• D)Excess reserves are zero, and it could not loan out any money.

---

Definitions:

Two Population Means

A statistical comparison between the mean values of two distinct groups or populations.

Sample Means

The arithmetic averages derived from multiple subsets of a population, reflecting the central tendency of each subset.

Population Means

The mean values calculated from the entirety of specified populations.

Independent Random Samples

Independent random samples are samples selected from a population in such a way that each member of the population has an equal and independent chance of being included.