A chartered bank's reserves are:
A)liabilities to both the chartered bank and the Bank of Canada holding them.
B)liabilities to the chartered bank and assets to the Bank of Canada holding them.
C)assets to both the chartered bank and the Bank of Canada holding them.
D)assets to the chartered bank and liabilities to the Bank of Canada holding them.

Question

Quizplus · Accepted Answer

Reserves are assets to the chartered bank because they represent funds that the bank can use to meet its obligations. They are liabilities to the Bank of Canada because the central bank holds these reserves on behalf of the chartered bank.

A Chartered Bank's Reserves Are