A bank borrows $100,000 from the Fed, leaving a $100,000 Treasury bond on deposit with the Fed to serve as collateral for the loan. The discount rate that applies to the loan is 4 percent, and the Fed is currently mandating a reserve ratio of 10 percent.

How much of the $100,000 borrowed by the bank must it keep as required reserves?

a. $0

b. $4,000

c. $10,000

d. $100,000