The Average Daily Net Transaction Accounts of a Local Bank

question 53

Multiple Choice

The average daily net transaction accounts of a local bank during the most recent reserve computation period is $589 million. The amount of average daily reserves at the Fed during the reserve maintenance period is $73.31 million,and the average daily vault cash corresponding to the maintenance period is $8.36 million. What is the average daily reserve balance required to be held by the bank during the maintenance period and is this bank in compliance with reserve requirements?

• A)$42.37 million; yes
• B)$46.79 million; yes
• C)$55.14 million; no
• D)$60.83 million; no
• E)$62.11 million; no

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Definitions:

Annual Dividend

The annual dividend is the total amount of dividend payments a company distributes to its shareholders over a year.

Common Stock

A type of security representing ownership in a corporation, entitling the holder to vote at shareholders' meetings and receive dividends.

Constant Rate

A fixed percentage that does not change over the specified period of time.

Market Rate of Return

The average rate of return that investors can expect to earn in the financial markets, often based on historical data of a specific market or index.