The Following Demand Deposits and Cash Reserves at the Fed

question 40

Multiple Choice

The following demand deposits and cash reserves at the Fed have been documented by a bank for the computation of reserve requirements (in millions) . Note that reserves are vault cash and reserves at the Fed.

-What is the average daily reserve required to be held by the bank for their demand deposits during the maintenance period? Suppose that the rules require no reserves for the first $14.5 million,3 percent for amounts between $14.5 million and $103.6 million,and 10 percent thereafter.

• A)$24.285 million.
• B)$28.862 million.
• C)$29.555 million.
• D)$21.913 million.

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