If the Value of Equity Is Less Than Zero on a Mark-To-Market

question 105

True/False

If the value of equity is less than zero on a mark-to-market accounting basis, liquidation of the FI may result in losses to the depositors or creditors.

---

Definitions:

Full Employment

An economic situation where all available labor resources are being used in the most efficient way possible, typically characterized by the absence of cyclical unemployment.

Cyclical Unemployment

Unemployment that rises during economic downturns and falls when the economy improves.

Seasonal Unemployment

Joblessness linked to seasonal variations in demand or supply of labor in certain industries.

Cyclical Unemployment

A type of unemployment that relates to the cyclical trends in the economy, fluctuating with the business cycle's contraction and expansion phases.