A French banks' liabilities contain 1,000,000 Euro of deposits. The reserve requirement in France is 10%. The bank's current excess reserves are 90,000 Euro. What is the maximum deposit outflow the bank can sustain without violating the reserve requirement and without making other adjustments to its balance sheet?

A.

99,000 Euro

B.

100,000 Euro

C.

90,000 Euro

D.

110,000 Euro

What is the yield to maturity of a bond that pays a coupon of 10 USD per year forever, and is currently priced at 100 USD? (Such a bond is sometimes called a "consol". It has no face value, and only a coupon payment that continues indefinitely.)

A.

10%

B.

There is not enough information provided to determine the yield to maturity

C.

1%

D.

0.1%

Which of the following is a key difference between a nonfinancial firm's balance sheet and a bank's balance sheet?

A.

Firms cannot directly hold bank reserves

B.

Equity in a bank's balance sheet is typically called "bank capital"

C.

All of these answers are correct

D.

Loans are usually an asset of banks but a liability of firms