XYZ Bank has total time deposits of $100 million. The Federal Reserve requires this bank to maintain 10 percent of its deposits. In this situation, the bank must maintain
A) $0.
B) $1,200,000.
C) $10,000,000.
D) $24,000,000.
E) $100,000,000.

Question

Quizplus · Accepted Answer

The bank must maintain 10% of its total time deposits of $100 million, which is $10 million. Therefore, choice C is the correct answer. The other choices are incorrect as they do not align with the 10% reserve requirement.

XYZ Bank Has Total Time Deposits of $100 Million