Table 21-6. -Refer to Table 21-6.If the Fed Requires a Reserve Ratio

question 280

Multiple Choice

Table 21-6.

-Refer to Table 21-6.If the Fed requires a reserve ratio of 6 percent,then what quantity of excess reserves does the Bank of Springfield now hold?

• A) $1,200
• B) $2,400
• C) $2,880
• D) $4,800

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Definitions:

Dividend Reinvestment Plans

Programs offered by corporations that allow investors to automatically reinvest their cash dividends in additional shares of the company's stock on the dividend payment date.

Preferred Stock

A type of stock that typically pays dividends at a fixed rate and has priority over common stock in terms of dividend payments and assets in the event of liquidation.

Ex-dividend Date

The date on which the buyer of a stock is not entitled to the next dividend payment. After this date, the stock sells without its dividend rights.

Declaration Date

The specific date on which a company's board of directors announces its next dividend payment.