Assume That a Bank Must Keep Reserves of 20% Against

question 100

Multiple Choice

Assume that a bank must keep reserves of 20% against deposits.The bank receives a primary deposit of $50,000.What amount of excess reserves can the bank safely lend?

• A)$10,000
• B)$20,000
• C)$40,000
• D)$50,000
• E)none of the above

Recognize the importance of a business plan and the key components it should contain.

Identify the different forms of business ownership and the legal implications of each.

Understand the role of operational planning and marketing strategy in a business plan.

Recognize the importance of financial management and projections in a business plan.

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Definitions:

Performance Measure

Indicators used to evaluate the efficiency, effectiveness, and success of an organization's activities or employees' actions.

Return on Investment

A financial metric used to evaluate the efficiency of an investment, calculated as the net profit of the investment divided by its cost.

Responsibility Report

A financial report that breaks down costs, revenues, and performance metrics by areas of accountability, aiding in evaluating managers' performance.

Financial Results

The outcomes of a company's operations in terms of profits, losses, revenue, and expenses over a specific period.