A Bank Has an Average Balance of Transactions Accounts,August 10

question 50

Multiple Choice

A bank has an average balance of transactions accounts,August 10 to 23,of $824.46 million.The average balance in the cash account is $42.014 million over this period.The bank is carrying forward a deficit of $1.276 million from the last reserve period.The rules require no reserves to be maintained for the first $8.5 million,3 percent for amounts between $8.5 million and $45.8 million,and 10 percent thereafter.

If over the first 12 days of the current reserve maintenance period the average daily reserve held were $37 million,what does the bank need to hold as reserves over the last two days to exactly meet the reserve requirement?

• A)$86.42 million.
• B)$91.46 million.
• C)$79.63 million.
• D)$99.14 million.

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Definitions:

Gulf Stream

A strong, warm ocean current that originates in the Gulf of Mexico, flowing into the Atlantic Ocean, influencing climate patterns in Europe and North America.

Atlantic Ocean

The second-largest of the world's oceans, bounded by the Americas to the west and Europe and Africa to the east.

Warm Current

A current of warmer ocean water that moves away from the equator towards the poles, influencing the climate of the regions it flows through.

Ocean Currents

Streams of seawater that move through the earth's oceans in a regular pattern, influenced by wind, salinity, and temperature differences.