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

question 14

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. 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:

Planetary Motion

The movement of planets around a star, such as the orbit of Earth and other planets around the Sun.

Proxy Variable

An auxiliary variable used in statistical analyses to represent an unobservable or difficult-to-measure variable.

Confounding Variable

A variable that influences both the dependent variable and independent variable, causing a spurious association.

Cleanliness

The state of being free from dirt, pollutants, or other unwanted substances.