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Use the following to answer questions:
Scenario: First National Bank
First National Bank has $80 million in checkable deposits, $15 million in deposits with the Federal Reserve, $5 million cash in the bank vault, and $5 million in government bonds.
-(Scenario: First National Bank) Look at the scenario First National Bank. If the minimum reserve ratio is 20%, how much is the bank required to keep in reserves?


Definitions:

EMV

Expected Monetary Value; a statistical technique in decision-making that calculates the average outcome when the future includes scenarios that may or may not happen.

Decision Tree Construction

The process of building a graphical representation of decisions and their possible consequences, outcomes, and related costs.

Capacity Decision

The process of determining the level of capacity needed to meet varying demands for a business's goods or services.

Demand Forecast

The process of estimating the future demand for a product or service based on historical data and trends.

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