Which of the following are part of a commercial bank's reserves?
I. cash in the bank's vaults
II. loans
III. cash in checking accounts
A) I only
B) I and II
C) I and III
D) I, II and III

Question

Quizplus · Accepted Answer

Reserves of a commercial bank include cash in the bank's vaults and deposits at the central bank, but not loans or cash in checking accounts. Loans are assets the bank uses to earn interest, and cash in checking accounts is a liability, representing money the bank owes to its depositors.

Which of the Following Are Part of a Commercial Bank's