Bank A has checkable deposits of $100 million, vault cash equaling $1 million and deposits at the Fed equaling $14 million. If the required reserve rate is ten percent what is the maximum amount Bank A could lend:
A. $85 million.
B. $15 million.
C. $14 million.
D. $5 million.
Answer:D
Bank A has checkable deposits of $100 million, vault cash equaling $1 million and deposits at the Fed equaling $14 million. If the required reserve rate is ten percent what is the maximum amount Bank A could lend:
A. $85 million. B. $15 million. C. $14 million. D. $5 million.