The Average Daily Net Transaction Accounts of a Local Bank

question 54

Multiple Choice

The average daily net transaction accounts of a local bank during the most recent reserve computation period is $687 million. The amount of average daily reserves at the Fed during the reserve maintenance period is $35.23 million,and the average daily vault cash corresponding to the maintenance period is $12.74 million. Is this bank in compliance with reserve requirements?

• A)Yes,the bank has excess daily reserves of $2.45 million.
• B)Yes,the bank has excess daily reserves of $11.71 million.
• C)No,the bank is short on daily reserves by $12.56 million.
• D)No,the bank is short on daily reserves by $4.36 million.
• E)No,the bank is short on daily reserves by $9.17 million.

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Definitions:

Withdraw

To remove funds from a bank account or to take back an offer or statement.

Annual Annuity

A fixed sum of money paid to someone each year, typically for the rest of their life or for a specified period.

Compounded Annually

Compounded annually refers to the process of earning interest on both the initial principal and the accumulated interest from previous periods, calculated once per year.

Save Each Year

The practice of setting aside a certain portion of income or revenue annually for future use, such as investments or emergency funds.