Suppose at the End of the Business Day a Bank

Multiple Choice

Suppose at the end of the business day a bank has $50,000 in excess reserves, and the desired reserve ratio is 20 percent.How can the bank maximize its profits?  

A)  if it keeps the excess reserves 
B)  if it loans out $40,000 
C)  if it loans $50,000 to another bank 
D)  if it borrows $50,000 to remove the excess reserves