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Question
A bank is required to maintain an average daily balance at the Fed of $700 million. On the first day of the maintenance period it maintains a balance of $750 million, the next two days it maintains a balance of $725 million, the next three days it maintains a balance of $625 million, the next three days it maintains a balance of $775 million, the next two days it maintains a balance of $700 million, and the next two days it maintains a balance of $675 million. What does its balance at the Fed has to be on the last day of the maintenance period in order to have a zero cumulative reserve deficit?
A. $700 million
B. $650 million
C. $750 million
D. $325 million
E. None of the options is correct
Answer
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