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

Suppose we are focusing on the computation period beginning on November 10th. The average vault cash for this computation period is $3 million per day.

a) What are the average daily net transaction accounts over the computation period?

b) What level of average daily reserves is required to be held by the bank with the Federal Reserve during the corresponding maintenance period?

c) Do the banks reserves at the Federal Reserve during the maintenance period meet the reserve requirements? Suppose there are no previous reserve deficits carried over.

Wednesday Thursday 5th $190 $$ Thursday 12th $220 $5 November Monday 2nd Net Transaction Accounts $230 Reserves at Fed $10 Monday 9th Net Transaction Accounts $170 Reserves at Fed $11 Monday 16 Net Transaction Accounts $210 Reserves at Fed $8 Monday 23th Net Transaction Accounts $250 Reserves at Fed 99 December Monday 30th Net Transaction Accounts $340 Reserves at Fed $11 Monday Tuesday 3rd $220 59 Tuesday 10th $250 $12 Tuesday 17th $310 $7 Tuesday 24th $270 $8 Tuesday 1st $350 $12 Tuesday Sth $290 $11 Tuesday 15th $200 $8 Tuesday 22th $280 $14 $200 $11 Wednesday Ilth $250 $9 Wednesday 18th $340 $6 Wednesday 25th $150 $4 Wednesday 2nd $250 $11 Wednesday 9th $310 $10 Wednesday 16th $320 $5 Wednesday 23th $250 $9 Friday 6th $220 $7 Friday 13th $280 $6 Friday 20th $160 $6 Friday 27th $280 $7 Friday Thursday 19th $180 SS Thursday 26th $250 SS Thursday 3rd $240 $10 Thursday 10th $310 S9 Thursday 17th $290 $7 Thursday 24th $220 S8 Net Transaction Accounts Reserves at Fed $280 $12 Monday $220 59 Friday 11th $310 $8 Friday 18th $280 S5 Friday 25 $200 $7 Net Transaction Accounts Reserves at Fed $170 S9 Monday 21th $190 $11 Net Transaction Accounts Reserves at Fed Wednesday Thursday 5th $190 $$ Thursday 12th $220 $5 November Monday 2nd Net Transaction Accounts $230 Reserves at Fed $10 Monday 9th Net Transaction Accounts $170 Reserves at Fed $11 Monday 16 Net Transaction Accounts $210 Reserves at Fed $8 Monday 23th Net Transaction Accounts $250 Reserves at Fed 99 December Monday 30th Net Transaction Accounts $340 Reserves at Fed $11 Monday Tuesday 3rd $220 59 Tuesday 10th $250 $12 Tuesday 17th $310 $7 Tuesday 24th $270 $8 Tuesday 1st $350 $12 Tuesday Sth $290 $11 Tuesday 15th $200 $8 Tuesday 22th $280 $14 $200 $11 Wednesday Ilth $250 $9 Wednesday 18th $340 $6 Wednesday 25th $150 $4 Wednesday 2nd $250 $11 Wednesday 9th $310 $10 Wednesday 16th $320 $5 Wednesday 23th $250 $9 Friday 6th $220 $7 Friday 13th $280 $6 Friday 20th $160 $6 Friday 27th $280 $7 Friday Thursday 19th $180 SS Thursday 26th $250 SS Thursday 3rd $240 $10 Thursday 10th $310 S9 Thursday 17th $290 $7 Thursday 24th $220 S8 Net Transaction Accounts Reserves at Fed $280 $12 Monday $220 59 Friday 11th $310 $8 Friday 18th $280 S5 Friday 25 $200 $7 Net Transaction Accounts Reserves at Fed $170 S9 Monday 21th $190 $11 Net Transaction Accounts Reserves at Fed