Table 141
Table $14.1$ EUBANK -Refer to Table 14

Table 14.1
Table $14.1$
EUBANK
$\begin{array}{|l|r|l|r|}\hline \text { Assets } & & \text { Liabilities and Net Worth } & \\\hline & & & \\\hline \text { Deposits at the Fed } & \$ 40,000 & \text { Checkable Deposits } & \$ 500,000 \\\hline \text { Cash } & \$ 10,000 & \text { Net Worth } & \$ 20,000 \\\hline \text { Loans } & \$ 300,000 & & \\\hline \text { Securities } & \$ 150,000 & & \\\hline \text { Fed Stock } & \$ 20,000 & & \\\hline\end{array}$
-Refer to Table 14.1 for the balance sheet of Eubank. If the interest rate on loans is 10 percent, the annual cost to Eubank of holding excess reserves is _____

A) 10 percent of $500,000.
B) 10 percent of net worth.
C) 10 percent of excess reserves.
D) $10,000.
E) 0.

Correct Answer:

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