Assume the Value of an FI's Average Loans Is $300

question 4

Multiple Choice

Assume the value of an FI's average loans is $300 and the value of its average deposits is $400.The FI has liquid assets of $100.What is the FI's financing requirement?

• A)$400 - $300 - $100 = $0
• B)$300 - $400 - $100 = -$200
• C)$400 - $300 + $100 = $200
• D)$300 - $400 + $100 = $0

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Definitions:

Foreclosure

The legal process by which a lender seizes and sells a property after the borrower fails to meet the terms of the mortgage.

Crisis

A critical, potentially destabilizing situation requiring a decision or change, often leading to significant personal or collective development.

Commitment

The state or quality of being dedicated to a cause, activity, or relationship.

Coherent Conception

A clear and logically connected idea or understanding of a complex aspect or entity.