For the Following Question,assume the Following Facts: (1)Chase (Which Is

question 38

Multiple Choice

For the following question,assume the following facts: (1) Chase (which is located in the United States) has a 20% reserve requirement imposed by the government.
(2) Bank of Germany has no reserve requirements.
(3) Both banks may invest at an 8% interest rate.
(4) Both banks have fixed costs of $3 per deposit made.
What is the difference between the minimum interest rates each bank can offer and still make a profit if the deposit is $500 for 1 year?

• A)0 - Both banks can offer the same rate.
• B)1%
• C)1.6%
• D)0.4%
• E)20%

---

Definitions:

Product Handling Functions

Activities involved in the physical handling of products, including storage, transportation, and packaging, aimed at ensuring efficient and safe movement through the supply chain.

Facility Ownership

Pertains to having legal rights and responsibilities over a physical establishment where operations or activities are carried out.

Public Warehousing

Storage facilities and services offered by a third party to various customers, usually on a short-term basis.

Contract Warehousing

A service provided by third parties in which companies rent space in a warehouse that is managed by another firm, allowing for flexibility and reduction in the costs of managing a private warehouse.