-In the balance sheet for the FBN bank above, the entries are in millions of dollars. If the desired reserve ratio equals 10 percent, FBN Bank has unplanned reserves of
A) $280 million.
B) $200 million.
C) $360 million.
D) $0.

Question

-In the balance sheet for the FBN bank above, the entries are in millions of dollars. If the desired reserve ratio equals 10 percent, FBN Bank has unplanned reserves of
A) $280 million. 
B) $200 million. 
C) $360 million. 
D) $0.

Quizplus · Accepted Answer

Unplanned reserves are the excess reserves a bank holds over the required reserves. If the reserve ratio is 10%, and assuming the bank's total deposits are part of the balance sheet not provided in the question, the bank must hold 10% of its deposits as required reserves. Without specific numbers for deposits, we can infer from the choices given that if option A is correct, the bank's reserves exceed the required 10% of deposits by $280 million, indicating this amount as unplanned or excess reserves.

-In the Balance Sheet for the FBN Bank Above, the Entries