Scenario: Alpha Bank Has $100,000 in Total Assets and $45,000

question 157

Multiple Choice

Scenario: Alpha Bank has $100,000 in total assets and $45,000 in total liabilities. Beta Bank has $250,000 in total assets and $220,000 in total liabilities.
-Refer to the scenario above.If Beta Bank is faced with a bank run,what must it do?

• A) Liquidate its long-term, illiquid assets
• B) Not pay out the deposits that are being withdrawn
• C) Rely on the FDIC to pay out the withdrawn deposits
• D) Invest more of its short-term assets in long-term assets to protect them

---

Definitions:

Beneficiary

An individual or entity entitled to benefits or proceeds from a will, insurance policy, retirement account, or other contractual arrangement.

Terminate

To bring something to an end or conclusion, effectively stopping its continuation or existence.

Voidable

A term referring to a contract or transaction that is valid and enforceable but may be declared void by one party due to certain defects.

Minor

An individual under the age of legal adulthood, typically under 18, and thus is limited in their legal capacity to make certain types of decisions or enter into contracts.