Table 29-4. The First Bank of Wahooton

question 319

Multiple Choice

Table 29-4.
The First Bank of Wahooton

-Refer to Table 29-4.If the bank faces a reserve requirement of 20 percent,then it

• A) has $10,000 of excess reserves.
• B) needs $10,000 more reserves to meet its reserve requirements.
• C) needs $5,000 more reserves to meet its reserve requirements.
• D) just meets its reserve requirement.

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Definitions:

Common Shares

Equity securities that represent ownership interests in a corporation, providing voting rights and potential dividends to shareholders.

Preferred Shares

A class of ownership in a corporation with a fixed dividend, that has priority over common shares in the distribution of dividends and assets.

SEC Requires

Mandatory rules and requirements established by the Securities and Exchange Commission that publicly traded companies must follow to protect investors and ensure the integrity of the securities markets.

Common Stock

Common stock represents units of ownership interest or equity in a corporation, where holders usually have voting rights to elect the board of directors.