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Question
A bank currently has $50 million in stable deposits against which they want to keep 10% reserves, $100 in vulnerable deposits against which they want to keep 40% reserves, and they have $50 million in "hot money" deposits against which they want to keep 90% reserves. The legal reserves for this bank are 10% of all deposits. What is the bank's liability liquidity reserve?
A. $90 million
B. $81 million
C. $70 million
D. $20 million
E. None of the options is correct
Answer
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