University National Bank Balance Sheet
Assets Liabilities

-The above table has the balance of the University National Bank. All figures are in millions of dollars. The desired reserve ratio is 20 percent. What is the value of excess reserves held by the University National Bank?

Question

University National Bank Balance Sheet
Assets Liabilities
 
-The above table has the balance of the University National Bank. All figures are in millions of dollars. The desired reserve ratio is 20 percent. What is the value of excess reserves held by the University National Bank?

Quizplus · Accepted Answer

To determine excess reserves, we first need to calculate the required reserves, which is equal to 20% of the bank's deposits. So, required reserves = 0.20 x $1,160 million = $232 million.
Now, to find excess reserves, we need to subtract required reserves from actual reserves:
Excess reserves = Actual reserves - Required reserves
Excess reserves = $584 million - $232 million = $352 million
Therefore, the value of excess reserves held by the University National Bank is $352 million. Option D is incorrect as the question asks for excess reserves held and not actual reserves.