The Percentage of Deposits That Must Be Held as Reserves

question 138

Multiple Choice

The percentage of deposits that must be held as reserves is called

• A)excess reserves
• B)required reserves
• C)required reserve ratio
• D)none of the above

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Definitions:

Discount Rate

The interest rate by which future cash flows are devalued to their present worth in a DCF analysis.

Cash Flows

represent the net amount of cash and cash-equivalents being transferred into and out of a business.

Zero-Interest Financing

Zero-Interest Financing is a loan or credit offer with a 0% interest rate for a set period, making purchases more affordable upfront but often requiring a good credit score.

APR

Annual Percentage Rate, which represents the annualized cost of credit including interest and fees, making it easier to compare loan products.