A US Bank Has £75 Million in Deposits and Makes a a Loan

question 47

Multiple Choice

A U.S. bank has £75 million in deposits and makes a loan of £90 million when the exchange rate is $1 = £1. 5. If the exchange rate changes to $1 = £1, then the bank's net worth will change by

• A)+$5 million.
• B)+$30 million.
• C)-$5 million.
• D)-$30 million.

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Definitions:

Wounded Knee

The Wounded Knee Massacre occurred in 1890 near Wounded Knee Creek in South Dakota, where U.S. Army troops killed approximately 150-300 Lakota Sioux, many of whom were women and children, marking a tragic end to the Indian Wars.

Urban Centers

Areas that are significantly more densely populated than surrounding territories and are known as hubs for economic, cultural, and political activities.

Westerners

Individuals originating from or associated with the Western part of the United States, or broadly, from Western countries, especially in the context of cultural or political discussions.

1900

The year 1900 marks the turn of the 20th century, known for the peak of the Second Industrial Revolution, the Boxer Rebellion in China, and as the year before the assassination of Queen Victoria's son, King Umberto I of Italy.