Suppose the XYZ Bank Has Excess Reserves of $4,000 and Demand

question 134

Multiple Choice

Suppose the XYZ bank has excess reserves of $4,000 and demand deposits of $80,000. If the required reserve ratio is 25 percent, the banks total reserves equal:

• A)​$16,000.
• B)​$20,000.
• C)​$24,000.
• D)​$84,000.

---

Definitions:

Footnote

Additional information provided at the bottom of financial statements to clarify or expand on the data presented.

Pro Forma Income

An estimate of the net income and other financial metrics for a future period, based on projected revenues and expenses.

Nonrecurring

Items or events, such as extraordinary charges or gains, that are not expected to happen regularly or predictably.

Profitability Ratios

Financial metrics used to evaluate a company's ability to generate profit relative to its revenue, assets, equity, or other financial balances.