Answer:
$650 million
Explanation:
Calculation to determine the 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
First step is to determine the balance maintained for 13 days in term of product
Using this formula
Product=Numbers of days Balance maintained for those days
Day Balance Product
1 *$750 million=$750 million
2* $725 million=$1,450 million
3* $625 million=$1,875 million
3* $775 million=$2,325 million
2*$700 million=$1,400 million
2*$675 million=$1,350 million
13 $9,150 million
($750 million +$1,450 million+$1,875 million+$2,325 million+$1,400 million+$1,350 million)
Now let calculate the required balance on the last day
Maintained required for 14 days in term of product $9,800 million
(14*$700 million)
Less balance maintained for 13 days in term of product ($9,150 million)
Required balance on the last day $650 million
($9,800 million-$9,150 million)
Therefore its balance at the Fed has to be $650 million on the last day of the maintenance period in order to have a zero cumulative reserve deficit.
