The table below shows data in millions) for Sun Trust Banks in September 2007 and September 2008.
$$\begin{array} { | c | c | c | }
\hline & 2007 & 2008 \
\hline \text { Loans } & \$ 83 & \$ 78 \
\hline \text { Reserves } & \$ 4 & \$ 5 \
\hline \text { Deposits } & \$ 114 & \$ 95 \
\hline
\end{array}$$
The data show that Sun Trust
A) has fewer excess reserves in 2008.
B) increased its reserve ratio to 6.4 percent over the 12 months.
C) faced a higher currency drain ratio in 2008.
D) increased its reserve ratio to 5.3 percent over the 12 months.

Question

The table below shows data in millions) for Sun Trust Banks in September 2007 and September 2008.
$$\begin{array} { | c | c | c | } 
\hline & 2007 & 2008 \
\hline \text { Loans } & \$ 83 & \$ 78 \
\hline \text { Reserves } & \$ 4 & \$ 5 \
\hline \text { Deposits } & \$ 114 & \$ 95 \
\hline
\end{array}$$
The data show that Sun Trust
A) has fewer excess reserves in 2008.
B) increased its reserve ratio to 6.4 percent over the 12 months.
C) faced a higher currency drain ratio in 2008.
D) increased its reserve ratio to 5.3 percent over the 12 months.

Quizplus · Accepted Answer

The reserve ratio is calculated as reserves divided by deposits. In 2007, it was 4/114 = 3.5%. In 2008, it was 5/95 = 5.3%.

The Table Below Shows Data in Millions) for Sun Trust