If a Bank Holds $20,000 in Desired Reserves in Order

question 112

Multiple Choice

If a bank holds $20,000 in desired reserves in order to meet a desired reserve ratio of 40 percent,demand deposits must equal

• A)$20,000.
• B)$40,000.
• C)$50,000.
• D)$100,000.

Distinguish between public and private corporations based on stock characteristics.

Grasp the effects of correcting errors on retained earnings and how to calculate year-end balances.

Know the main sources of stockholders' equity and the primary purpose of stock splits.

Understand the role and significance of corporate documentation and governance structures.

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Definitions:

Board Of Directors

consists of a group of elected individuals who represent shareholders' interests, overseeing and advising a company's management.

Bonds

Fixed income investment products that represent loans made by an investor to a borrower, typically corporate or governmental, which pay periodic interest payments.

Stocks

Shares of ownership in a company, giving shareholders a stake in the company's assets and earnings.

Dividend

A portion of a company's earnings distributed to shareholders, typically in the form of cash or additional stock.