The balance sheet of a hypothetical bank ABC Bank is shown b

The balance sheet of a hypothetical bank, ABC Bank, is shown below. The reserve requirement is 10%. ABC Bank Assets Liabilities 90 Deposits $900 Vault Cash Deposits at the Fed Loans 10 800 In the balance sheet above, the excess reserve ratio of ABC bank is and its excess reserves are OA. 0.1;$0 B. 0095, $900 O C. 0.011, $10 D. There is not enough information available to answer the question. Click to select your answer

Solution

Solution

Option A 0.1 , $ 0 is correct answer

Reason - Reserved Ratio 10/100 = 0.1 and

excess reserved Liabilities = Asssest

10 + 90 + 800 = 900

Reserved Excess = 900 - 900 = 0