Question 3:

The following demand deposits and cash reserves at the Fed have been documented by a bank for the computation of reserve requirements (in millions). Note that reserves are vault cash and reserves at the Fed.

	Monday	Tuesday	Wednesday	Thursday	Friday
	6/12	6/13	6/14	6/15	6/16
Deposits	$300	$320	$280	$290	$270
Reserve	$28	$29	$29	$17	$18
	6/19	6/20	6/21	6/22	6/23
Deposits	$310	$305	$320	$340	$310
Reserve	$31	$29	$28	$29	$15
	6/26	6/27	6/28	6/29	6/30
Deposits	$240	$230	$250	$260	$270
Reserve	$19	$19	$21	$19	$24
	7/3	7/4	7/5	7/6	7/7
Deposits	$300	$320	$280	$290	$270
Reserve	$27	$26	$27	$24	$22
	7/10	7/11	7/12	7/13	7/14
Deposits	$310	$305	$320	$340	$310
Reserve	$21	$21	$20	$17	$18
	7/17	7/18	7/19	7/20	7/21
Deposits	$240	$230	$250	$260	$270
Reserve	$31	$29	$28	$29	$15
	7/24	7/25	7/26	7/27	7/28
Deposits	$300	$320	$280	$290	$270
Reserve	$19	$19	$21	$19	$24
	7/31	8/1	8/2	8/3	8/4
Deposits	$310	$305	$320	$340	$310
Reserve	$23	$22	$24	$22	$23

1. What are the average daily demand deposit balances over the reserve computation period beginning the week of June 12?
2. What is the average daily reserve required to be held by the bank for their demand deposits during the maintenance period? Suppose that the rules require no reserves for the first $14.5 million, 3 percent for amounts between $14.5 million and $103.6 million, and 10 percent thereafter.
3. Is the bank in compliance with the requirements?