If a Bank Has a Required Reserve Ratio of 20

question 23

Multiple Choice

If a bank has a required reserve ratio of 20% and has required reserves of $300,000,000,how much does the bank hold in deposits?

• A) $33,750,000
• B) $60,000,000
• C) $360,000,000
• D) $1,500,000,000
• E) There is not enough information to solve this problem.

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Definitions:

Corporate Takeover

The acquisition of one company, called the target company, by another, referred to as the acquiring company, which effectively allows the acquiring company to make decisions for the target company.

Distribution

Payment made by a firm to its owners from sources other than current or accumulated earnings.

Going-Private Transaction

A corporate action in which a company's outstanding public shares are bought out, usually by a private investor, to delist it from public stock exchanges.

Reverse IPO

A process where a private company becomes publicly traded by acquiring a majority stake in a public company, bypassing traditional initial public offerings (IPO) processes.