Which of the following is true of the bank reserves held at the Fed?
A) These reserves are an asset to both the bank and the Fed.
B) These reserves are a liability to both the bank and the Fed.
C) These reserves are an asset to the bank and a liability to the Fed.
D) These reserves are a liability to the bank and an asset to the Fed.

Question

Quizplus · Accepted Answer

Bank reserves held at the Fed are a liability to the Fed because the Fed owes these reserves to the bank, and they are an asset to the bank because the bank owns the reserves. Therefore, choice C is the correct answer.

Which of the Following Is True of the Bank Reserves