As a Result of Loan Write-Offs, Bank a Has to Be

question 3

Multiple Choice

As a result of loan write-offs, Bank A has to be liquidated by the regulators.The book value of the assets and liabilities of the bank is presented below (in millions of dollars) .The market value of the loans has been estimated at $240 million. $$\begin{array} { | l | l | l | l | } \hline \text { Loans (book value) } & \$ 340 & \text { Insured Deposits } & \$ 200 \\\hline & & \text { Uninsured Deposits } & \$ 100 \\\hline & & \text { Equity } & \$ 40 \\\hline\end{array}$$ What is the current net worth (market value) of the bank?

• A)+$40 million.
• B)$0 million.
• C)-$40 million.
• D)-$60 million.
• E)-$100 million.

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Definitions:

Lewis Dot Structure

A diagram that represents the valence electrons of atoms within a molecule, showing the bonding between atoms as well as lone pairs of electrons.

He

Helium, a colorless, odorless, tasteless, non-toxic, inert, monatomic gas that heads the noble gas series in the periodic table.

Lewis Dot Structure

A graphical representation of the valence electrons of atoms, indicating how the electrons are shared or paired between atoms in a molecule.

Ca

Calcium, a chemical element with the symbol Ca and atomic number 20, an alkaline earth metal essential for living organisms, particularly in cell physiology.