Bank a Has Checkable Deposits of $10 Million and Total

question 123

Multiple Choice

Bank A has checkable deposits of $10 million and total reserves of $1 million.The required reserve ratio is 9 percent.The bank has required reserves of

• A) $910,000.
• B) $90,000.
• C) $900,000.
• D) $1,000,000.
• E) There is not enough information provided to answer this question.

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Definitions:

Sharpe's Measure

A risk-adjusted performance metric that measures the excess return per unit of deviation in an investment asset or portfolio.

Residual Standard Deviation

A measure of the amount by which each observed value in a data set differs from the average of those values.

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates higher volatility than the market, while a beta less than 1 indicates lower.