Given That 25 Percent of the Loans Have Been Identified

question 54

Multiple Choice

$\begin{array}{lccc} \text { Securities (at par) } & \text { \$ 250 Deposits}& \$975 \\ \text { Loans (at par) } & \text { \$ 760 Capital} & \$ 35\end{array}$
Given that 25 percent of the loans have been identified as problem loans,and if historical cost accounting methods allow the bank to write down only 10 percent of the problem loans,what will be the book value of capital?

• A)$35 million.
• B)-$155 million.
• C)$16 million.
• D)-$7 million.

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Definitions:

Fertilization

Process that begins with the penetration of the secondary oocyte by the spermatozoon and is completed with the fusion of the male and female pronuclei.

Implantation

The process by which a fertilized egg attaches to the lining of the uterus, beginning the stages of pregnancy.

Chorionic Villi

Finger-like projections from the chorion that extend into the uterine wall, facilitating nutrient exchange between mother and fetus.

Syncytiotrophoblast

Outer layer of the trophoblast composed of multinucleated cells.