Solved

Use the Following to Answer Questions

Question 133

Multiple Choice

Use the following to answer questions .
Exhibit: Balance Sheet of the Alpha-Beta Bank
Use the following to answer questions . Exhibit: Balance Sheet of the Alpha-Beta Bank -(Exhibit: Balance Sheet of the Alpha-Beta Bank) 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.
-(Exhibit: Balance Sheet of the Alpha-Beta Bank) 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.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q128: Which of the following is included in

Q129: The banking system is able to make

Q130: The deposit multiplier is the inverse of<br>A)

Q131: The Fed's most important and most frequently

Q132: The Fed seldom uses the reserve requirement

Q134: If the Fed raises its target for

Q135: Explain the differences between the two money

Q136: Suppose a bank has $50,000 in deposits

Q137: In the federal penitentiary at Lompoc, California,

Q138: An institution that collects funds from lenders