Table 9-3 Balance Sheet of the Alpha-Beta Bank

Multiple Choice

Table 9-3
Balance Sheet of the Alpha-Beta Bank
(All figures in $ million)

-Refer to Table 9-3. If the required reserve ratio is 10% and the market interest rate is 6%, then the opportunity cost of holding excess reserves is

A) zero since Alpha-Beta does not hold any excess reserves.
B) $0.9 million.
C) $2.4 million.
D) $4 million.