Medium Term Notes Issued by a U [Reference: 18-120

Multiple Choice

Medium term notes issued by a U.S.DI

A) generally have a maturity of five to seven years.
B) are a stable source of funds with low withdrawal risk.
C) are not subject to reserve requirements.
D) are not subject to deposit insurance.
E) All of the options.
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.
$\begin{array}{|l|r|r} \hline & \text { Monday } & \text { Tuesday } \\\hline & \mathbf{6 / 1 2} & \mathbf{6 / 1 3} \\\hline \text { D.Deposits } & \$ 300 & \$ 320 \\\hline \text { Reserves } & \$ 28 & \$ 29 \\\hline & \mathbf{6 / 1 9} & \mathbf{6 / 2 0} \\\hline \text { D.Deposits } & \$ 310 & \$ 305 \\\hline \text { Reserves } & \$ 31 & \$ 29 \\\hline & \mathbf{6 / 2 6} & \mathbf{6 / 2 7} \\\hline \text { D.Deposits } & \$ 240 & \$ 230 \\\hline \text { Rescrves } & \$ 19 & \$ 19 \\\hline & 7 / 3 & 7 / 4 \\\hline \text { D.Deposits } & \$ 300 & \$ 320 \\\hline \text { Rescrves } & \$ 27 & \$ 26 \\\hline & \mathbf{7} / \mathbf{1 0} & \mathbf{7} / \mathbf{1 1} \\\hline \text { D.Deposits } & \$ 310 & \$ 305 \\\hline \text { Reserves } & \$ 21 & \$ 21 \\\hline & \mathbf{7} / \mathbf{1 7} & \mathbf{7 / 1 8} \\\hline \text { D.Deposits } & \$ 240 & \$ 230 \\\hline \text { Reserves } & \$ 31 & \$ 29 \\\hline & \mathbf{7 / 2 4} & \mathbf{7} 5 \\\hline \text { D.Deposits } & \$ 300 & \$ 320 \\\hline \text { Reserves } & \$ 19 & \$ 19 \\\hline & \mathbf{7} / \mathbf{3 1} & \mathbf{8 / 1} \\\hline \text { D.Deposits } & \$ 310 & \$ 305 \\\hline \text { Reserves } & \$ 23 & \$ 22 \\\hline\end{array}\begin{array}{|r|r|r|}\hline \text { Wednesday } & \text { Thursday } & \text { Friday } \\\hline \mathbf{6 / 1 4} & \mathbf{6 / 1 5} & \mathbf{6 / 1 6} \\\hline \$ 280 & \$ 290 & \$ 270 \\\hline \$ 29 & \$ 17 & \$ 18 \\\hline \mathbf{6 / 2 1} & \mathbf{6 / 2 2} & \mathbf{6 / 2 3} \\\hline \$ 320 & \$ 340 & \$ 310 \\\hline \$ 28 & \$ 29 & \$ 15 \\\hline \mathbf{6 / 2 8} & \mathbf{6 / 2 9} & \mathbf{6 / 3 0} \\\hline \$ 250 & \$ 260 & \$ 270 \\\hline \$ 21 & \$ 19 & \$ 24 \\\hline 7 / 5 & 7 / 6 & 7 / 7 \\\hline \$ 280 & \$ 290 & \$ 270 \\\hline \$ 27 & \$ 24 & \$ 22 \\\hline 7 / \mathbf{1 2} & 7 / 13 & 7 / \mathbf{1 4} \\\hline \$ 320 & \$ 340 & \$ 310 \\\hline \$ 20 & \$ 17 & \$ 18 \\\hline 7 / \mathbf{1 9} & 7 / 20 & 7 / 21 \\\hline \$ 250 & \$ 260 & \$ 270 \\\hline \$ 28 & \$ 29 & \$ 15 \\\hline 7 / \mathbf{2 6} & 7 / 27 & 7 / \mathbf{2 8} \\\hline \$ 280 & \$ 290 & \$ 270 \\\hline \$ 21 & \$ 19 & \$ 24 \\\hline \mathbf{8 / 2} & \mathbf{8 / 3} & \mathbf{8 / 4} \\\hline \$ 320 & \$ 340 & \$ 310 \\\hline \$ 24 & \$ 22 & \$ 23 \\\hline\end{array}$ [Reference: 18-120