Assume that u. s. national bank has no excess reserves and that the reserve ratio is 20 percent. if u. s. national borrows $5 million from a federal reserve bank through a repo transaction, it can expand its loans by a maximum of
a) $1 million.
b) $0.
c) $25 million.
d) $5 million.

Consider a treasury bill with a rate of return of 5% and the following risky securities: security a: e(r) = .15; variance = .0400 security b: e(r) = .10; variance = .0225 security c: e(r) = .12; variance = .1000 security d: e(r) = .13; variance = .0625 the investor must develop a complete portfolio by combining the risk-free asset with one of the securities mentioned above. the security the investor should choose as part of her complete portfolio to achieve the best cal would be a. security a b. security b c. security c d. security d