City Bank has estimated that its average dally net transaction accounts balance over the recent
14-day computation period was $248.50 million. The average daily balance with the Fed over the
14 -day maintenance period was $8 million, and the average daily balance of vault cash over the
two-week computation period was $8 million. EXAMPLE 13-2 Computation of Daily Average
Required Reserves Consider ABC Bank's reserve manager, who wants to assess the bank's
minimum cash reserve requirement target. The manager knows the bank's net transaction
accounts balance at the close of the banking day on each of the 14 days over the period Tuesday,
June 30, to Monday, July 13. Consider the realized net transaction account positions of ABC
Bank in Table 13-25. The minimum daily average reserves that a bank mutt maintain is
computed as a percentage of the daily average net transaction accounts held by the bank over the
two-week computation period, where Friday's balances are carried over for Saturday and
Sunday. The minimum daily average for ABC Bank to hold against the daily average of
$1,350.70 million in net transaction accounts is calculated as follows (amounts in millions):
Daily average net transaction accounts Reserve percentage = Daily average reserves required a.
Under the rules effective In 2020 , what is the amount of average dally reserves required to be
held during the reserve maintenance period for these demand deposit balances? b. What is the
average dally balance of reserves held by the bank over the maintenance period? By what
amount were the average reserves held higher or lower than the required reserves? c. If the bank
had transferred $35 million of Its deposits every Friday over the two-week computation period to
one of Its offshore facllitles, what would be the revised average dally reserve requirement?
Complete this question by entering your answers in the tabs below. Under the rules effective in
2020 , what is the amount of average daily reserves required to be held during the reserve
maintenance period for these demand deposit balances? (Do not round intermediate calculations.
Enter your answer in millions rounded to 3 decimal places. (e.g., 32.161 ))
What is the average daily balance of reserves held by the bank over the maintenance period? By
what amount were the average reserves held higher or lower than the required reserves? (Input
the amount as a positive value. Enter your answers in millions rounded to 3 decimal places. (e.g.,
32.161) )
If the bank had transferred $35 million of its deposits every Friday over the two-week
computation period to one of its offshore facilities, what would be the revised average daily
reserve requirement? (Do not round intermediate calculations. Enter your answer in millions
rounded to 3 decimal places. (e.g., 32.161)).
City Bank has estimated that its average dally net transaction accoun.pdf
1. City Bank has estimated that its average dally net transaction accounts balance over the recent
14-day computation period was $248.50 million. The average daily balance with the Fed over the
14 -day maintenance period was $8 million, and the average daily balance of vault cash over the
two-week computation period was $8 million. EXAMPLE 13-2 Computation of Daily Average
Required Reserves Consider ABC Bank's reserve manager, who wants to assess the bank's
minimum cash reserve requirement target. The manager knows the bank's net transaction
accounts balance at the close of the banking day on each of the 14 days over the period Tuesday,
June 30, to Monday, July 13. Consider the realized net transaction account positions of ABC
Bank in Table 13-25. The minimum daily average reserves that a bank mutt maintain is
computed as a percentage of the daily average net transaction accounts held by the bank over the
two-week computation period, where Friday's balances are carried over for Saturday and
Sunday. The minimum daily average for ABC Bank to hold against the daily average of
$1,350.70 million in net transaction accounts is calculated as follows (amounts in millions):
Daily average net transaction accounts Reserve percentage = Daily average reserves required a.
Under the rules effective In 2020 , what is the amount of average dally reserves required to be
held during the reserve maintenance period for these demand deposit balances? b. What is the
average dally balance of reserves held by the bank over the maintenance period? By what
amount were the average reserves held higher or lower than the required reserves? c. If the bank
had transferred $35 million of Its deposits every Friday over the two-week computation period to
one of Its offshore facllitles, what would be the revised average dally reserve requirement?
Complete this question by entering your answers in the tabs below. Under the rules effective in
2020 , what is the amount of average daily reserves required to be held during the reserve
maintenance period for these demand deposit balances? (Do not round intermediate calculations.
Enter your answer in millions rounded to 3 decimal places. (e.g., 32.161 ))
What is the average daily balance of reserves held by the bank over the maintenance period? By
what amount were the average reserves held higher or lower than the required reserves? (Input
the amount as a positive value. Enter your answers in millions rounded to 3 decimal places. (e.g.,
32.161) )
If the bank had transferred $35 million of its deposits every Friday over the two-week
computation period to one of its offshore facilities, what would be the revised average daily
reserve requirement? (Do not round intermediate calculations. Enter your answer in millions
rounded to 3 decimal places. (e.g., 32.161))
