Question
CIBC borrows $500,000 from the Bank of Canada, leaving a $500,000 of securities on deposit with the Bank of Canada to serve as collateral for
CIBC borrows $500,000 from the Bank of Canada, leaving a $500,000 of securities on deposit with the Bank of Canada to serve as collateral for the loan. The bank rate that applies to the loan is 2.5% and the desired reserve ratio of 8% percent. How much of the $500,000 borrowed by CIBC will be kept asdesired reserves?
A.$40000
B.$460000
C.$0
D.$100000
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Intermediate Microeconomics and Its Application
Authors: Walter Nicholson, Christopher M. Snyder
12th edition
978-1133189022, 1133189024, 1133189032, 978-1305176386, 1305176383, 978-0357687000, 978-1133189039
