Use the Balance Sheet for the Following Questions

question 186

Multiple Choice

Use the balance sheet for the following questions.
Table 29-3

-Refer to Table 29-3. If the reserve requirement is 10 percent and then someone deposits $50 000 into the bank, what is the bank's reserve position?

• A)It will have $57 000 in excess reserves.
• B)It will have $52 000 in excess reserves.
• C)It will need to raise reserves by $5000.
• D)It will have excess reserves of $2000.

---

Definitions:

Upward Sloping

A graph line that shows an increase in value over time, often used in economics and finance to indicate growth.

Convertible Bonds

Security that is convertible into shares of common stock, at a fixed price, at the option of the bondholder.

Subordinated Debt

A type of debt that ranks below other debts with regard to claims on assets or earnings in the event of a liquidation.

Junk Bonds

High-yield but high-risk bonds issued by companies or entities with lower credit ratings, indicating a higher risk of default.