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.

1. What are the average daily net transaction accounts over the computation period?

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

3. 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.

4. What is the lowest level of reserves at the Federal Reserve the bank can hold without penalty? (2

points)

November Net Transaction Accounts Reserves at Fed Monday 2nd $230 $10 Monday 9th Friday 6th $220 $7 Friday 13th $280 $6 Friday 20th Net Transaction Accounts Reserves at Fed Wednesday 4th $200 $11 Wednesday 11th $250 $9 Wednesday 18th $340 $6 Wednesday 25th $150 Tuesday 3rd $220 $9 Tuesday 10th $250 $12 Tuesday 17th $310 $7 Tuesday 24th $270 $8 Tuesday 1st $350 $12 Tuesday Net Transaction Accounts Reserves at Fed $160 Net Transaction Accounts Reserves at Fed December $170 $11 Monday 16" $210 $8 Monday 23th $250 $9 Monday 30th $340 $11 Monday 7th $280 $12 Monday 146 $170 $9 Monday 21th $190 $11 $6 Friday 27th $280 $7 Friday Thursday Sth $190 $8 Thursday 12th $220 $5 Thursday 19th $180 $5 Thursday 26th $2.50 $5 Thursday 3rd $240 $10 Thursday 10th $310 $9 Thursday 17th $290 $7 Thursday 24th $220 $8 Net Transaction Accounts Reserves at Fed Wednesday 2nd $250 $11 Wednesday 8th 9th Net Transaction Accounts Reserves at Fed $290 $11 Tuesday 15th $200 $8 Tuesday 22th $280 $14 Net Transaction Accounts Reserves at Fed $220 $9 Friday 11th $310 $8 Friday 18th $280 $5 Friday 25 $200 $7 $310 $10 Wednesday 16th $320 $5 Wednesday 23th $250 $9 Net Transaction Accounts Reserves at Fed November Net Transaction Accounts Reserves at Fed Monday 2nd $230 $10 Monday 9th Friday 6th $220 $7 Friday 13th $280 $6 Friday 20th Net Transaction Accounts Reserves at Fed Wednesday 4th $200 $11 Wednesday 11th $250 $9 Wednesday 18th $340 $6 Wednesday 25th $150 Tuesday 3rd $220 $9 Tuesday 10th $250 $12 Tuesday 17th $310 $7 Tuesday 24th $270 $8 Tuesday 1st $350 $12 Tuesday Net Transaction Accounts Reserves at Fed $160 Net Transaction Accounts Reserves at Fed December $170 $11 Monday 16" $210 $8 Monday 23th $250 $9 Monday 30th $340 $11 Monday 7th $280 $12 Monday 146 $170 $9 Monday 21th $190 $11 $6 Friday 27th $280 $7 Friday Thursday Sth $190 $8 Thursday 12th $220 $5 Thursday 19th $180 $5 Thursday 26th $2.50 $5 Thursday 3rd $240 $10 Thursday 10th $310 $9 Thursday 17th $290 $7 Thursday 24th $220 $8 Net Transaction Accounts Reserves at Fed Wednesday 2nd $250 $11 Wednesday 8th 9th Net Transaction Accounts Reserves at Fed $290 $11 Tuesday 15th $200 $8 Tuesday 22th $280 $14 Net Transaction Accounts Reserves at Fed $220 $9 Friday 11th $310 $8 Friday 18th $280 $5 Friday 25 $200 $7 $310 $10 Wednesday 16th $320 $5 Wednesday 23th $250 $9 Net Transaction Accounts Reserves at Fed