Use the Following to Answer Questions

question 190

Multiple Choice

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

• A) $20 million
• B) $16 million
• C) $25 million
• D) $10 million

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Definitions:

Stocks

Financial instruments representing ownership shares in a corporation, giving holders a claim on the corporation's earnings and assets.

Dividends

A portion of a company's earnings distributed to its shareholders, representing a share of the corporate profits.

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A debate or disagreement regarding the relevance, impact, or appropriateness of dividend policies on a company's value and shareholders' wealth.

Stock Price

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