Question 715881
a)

12% of 600 million = 0.12*600 = 72 million


So they need $72 in cash in the vault to be in compliance with the required reserves ratio


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b)


(10/600)*100 = 0.01666666666667*100 = 1.666666666667 = 1 and 2/3% reserves ratio


So the answer is 1.6667% or 1 and 2/3%


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c)


It needs to add more cash to the vault or lower the total amount of deposits in the bank. 


If it goes with option 1, then it needs to have $72 million (so it needs to add 72 - 10 = 62 million)



If it goes with option 2, then it should reduce the total amount deposited to 10/0.12 = 83.333 million (roughly). So it would need to remove 600 - 83.333 = 516.667 million from its deposits (and give that money back to the customers)



Either option is viable and it will depend on the situation which one is best.