An FI Has Assets of $800 Million and Liabilities of $740

question 109

Multiple Choice

An FI has assets of $800 million and liabilities of $740 million. If the FI bought call options on bonds with a face value of $50 million, what is the minimum amount of the stockholder's potential true net worth?

• A)$10 million.
• B)$70 million.
• C)$110 million.
• D)$790 million.
• E)$850 million.

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Definitions:

Purchasing Power

The quantity and quality of goods and services that can be bought with a unit of currency.

Birth Rates

The number of live births per thousand of the population per year, a key demographic indicator.

Developing Countries

are nations with lower levels of socioeconomic development, characterized by lower income, less industrialization, and poorer health and educational statuses.

Economic Security

The condition of having stable income or other resources to support a standard of living now and in the foreseeable future.