If Total Deposits at Last Bank and Trust Are $100

question 33

Multiple Choice

If total deposits at Last Bank and Trust are $100 million, total loans are $70 million, and excess reserves are $20 million, then which of the following is the required reserve ratio?

• A) 70 percent.
• B) 30 percent.
• C) 20 percent.
• D) 10 percent.

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Definitions:

Net Income

The total profit of a company after all expenses, including taxes and interest, have been deducted from total revenue.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in a linear fashion.

Asset Impairments

The reduction in the recoverable value of a fixed asset or goodwill below its book value, reflected in the financial statements as an expense.

Future Cash Flows

Estimated amounts of money expected to be received or paid out by an entity in the future as a result of financial transactions or business operations.