If Problem Loans Reduce the Market Value of the Loan

question 97

Multiple Choice

$\begin{array}{lccc} \text { Securities (at par) } & \text { \$ 250 Deposits}& \$975 \\ \text { Loans (at par) } & \text { \$ 760 Capital} & \$ 35\end{array}$
If problem loans reduce the market value of the loan portfolio by 25 percent,what is the value of regulatory defined (book value) capital?

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

Differentiate between compensatory, punitive, and consequential damages in lawsuits against professionals.

Understand the requirements and standards for professional performance and duty in accounting practice.

Identify conditions under which professionals can be exempt from liability for breach of contract.

Explain the significance of scienter and its impact on establishing liability for fraud.

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Definitions:

Confidentiality

The ethical principle or legal right that a professional or organization should not disclose information about a client or patient to others without the consent of the individual.

Retained

Retained refers to something that is kept or continued to be used, held in position, or remembered.

Access

The ability, right, or opportunity to reach, use, or participate in something.

Minutes

The official written record of the discussions and decisions made during meetings.