Table 29-5. -Refer to Table 29-5. If the Bank Faces a Reserve

question 457

Multiple Choice

Table 29-5.
-Refer to Table 29-5. If the bank faces a reserve requirement of 8 percent, then the bank

• A)is in a position to make a new loan of $14,000.
• B)has fewer reserves than are required.
• C)has excess reserves of $16,400.
• D)None of the above is correct.

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Definitions:

Goodwill

The intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets.

GAAP

Generally Accepted Accounting Principles; a collection of standardized guidelines and practices for financial accounting used in a particular jurisdiction.

Historical Cost

The original monetary value of an asset or investment at the time of its acquisition.