#1 A bank has the following balance sheet: Reserves $1250 million; Loans $1525 million; Deposits $2200 million and capital $575 million. The bank suffers a deposit outflow of $1050 million. Does the bank need to acquire more funds to meet reserve requirements if the required reserve ratio is 20%?

answer choice:

		Yes, because the reserve ratio is 13.64%
		Yes, because the reserve ratio is 17.39%
		No, because the reserve ratio is 26.92%
		No, because the reserve ratio is 17.39%

#2

bank has the following balance sheet: Reserves $1250 million; Loans $1525 million; Deposits $2200 million and capital $575 million. The bank suffers a deposit outflow of $1050 million. Does the bank need to acquire more funds to meet reserve requirements if the required reserve ratio is 10%?

answer choice:

		Yes, because the reserve ratio is 13.64%
		No, because the reserve ratio is 26.92%
		No, because the reserve ratio is 17.39%
		Yes, because the reserve ratio is 17.39%

#3

XYZ Inc. recently reported $4 million of net income. Its EBIT was $15 million, and its tax rate was 40%. What was its interest expense?

answer choice:

		$8,333,333
		$5,000,000
		$8,846,154
		$8,939,394