The following net transaction accounts and cash reserves at the Fed have been documented by a bank for computation of its reserve requirements (in millions) under lagged reserve accounting.

April Monday 10th Tuesday 11th Wednesday 12th Thursday 13th Friday 14th Net transaction accounts $200 $300 $250 $280 $260 Reserves at Fed 20 22 21 18 27 Monday 17th Tuesday 18th Wednesday 19th Thursday 20th Friday 21st Net transaction accounts $280 $300 $270 $260 $250 Reserves at Fed 20 35 21 18 28 The average vault cash for the computation period has been estimated to be

$1 million per day.

a. What level of average daily reserves is required to be held by the bank during the maintenance period, May 11–24?

b. Is the bank in compliance with the requirements?

c. What amount of required reserves can be carried over to the following computation period?

d. If the average cost of funds to the bank is 8 percent per year and deposits at the Fed pay 0.5 percent, what is the effect on the income statement for this bank for this reserve period?