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Question
The following demand deposits and cash reserves at the Fed have been documented by a bank for the computation of reserve requirements (in millions). Note that reserves are vault cash and reserves at the Fed.
Is the bank in compliance with the requirements?
A. No, it does not meet the minimum reserve requirements.
B. Yes, it meets the minimum reserve requirements.
C. Yes, it meets the minimum requirement only after using the 2 percent carryover allowance.
D. Yes, it meets the minimum requirement only after using the 4 percent carryover allowance.
E. No, it does not meet the minimum reserve requirements even after using the 4 percent carryover allowance.
Answer
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