If a Bank Has $50,000 in Excess Reserves at the End

Multiple Choice

If a bank has $50,000 in excess reserves at the end of a business day and the required reserve ratio is 20 percent,the bank can increase its profits by:

A) keeping the excess reserves.
B) loaning out $40,000.
C) loaning out $50,000 to another bank.
D) borrowing $50,000 to remove the excess reserves.
E) keeping $10,000 and depositing $40,000 with the Fed.