Asked by Pablo Porcayo on Jul 22, 2024
Verified
Which is NOT a legal reserve?
A) Vault cash
B) Government securities
C) Deposits at a Federal Reserve Bank
Legal Reserve
The minimum amount of funds that a bank or financial institution must hold in reserve against deposits, as mandated by regulatory authorities.
Government Securities
Financial instruments issued by the government to finance its expenditures, offering a relatively safe investment.
Vault Cash
Paper currency and coins held by a bank in its vault and used to satisfy demands for withdrawals or to resolve deficits in reserve accounts.
- Identify and differentiate between types of reserves and securities relevant to the Federal Reserve System.
Verified Answer
Learning Objectives
- Identify and differentiate between types of reserves and securities relevant to the Federal Reserve System.
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