Which of the following is a discretionary factor that will increase a bank's daily reserves held at the Federal Reserve?
A)The prior day's immediate cash letter
B)Federal funds purchased
C)Deposits from the U.S.Treasury
D)Currency received from the Federal Reserve
E)Deficits at the local clearinghouse

Question

Quizplus · Accepted Answer

Federal funds purchased refer to short-term loans between banks, which can generate interest income for the lending bank and increase their reserves held at the Federal Reserve.

Answer: C 
 Deposits from the U.S. Treasury increase a bank's reserves held at the Federal Reserve, as the Treasury maintains its account with the Federal Reserve.

Answer: D 
 Currency received from the Federal Reserve increases a bank's reserves held at the Federal Reserve, as the bank can use the currency for customer withdrawals or other purposes.

Therefore, the discretionary factors that will increase a bank's daily reserves held at the Federal Reserve are B, C, and D.

Which of the Following Is a Discretionary Factor That Will