What Is the Asset Adjustment to a Bank's Balance Sheet

question 104

Multiple Choice

What is the asset adjustment to a bank's balance sheet if the bank sold a five-year,7 percent annual coupon $100,000 bond acquired at par,but now yielding 8 percent? The bond was not in the mark-to-market portfolio.

• A)A $96,007 reduction in assets.
• B)A $96,007 increase in assets.
• C)A $100,000 reduction in assets.
• D)A $100,000 increase in assets.

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Definitions:

Retinal Disparity

The slight difference in the visual images that each eye perceives because of the different angles in which each eye views the world, contributing to depth perception.

Binocular Cue

Visual information taken in by two eyes that enable perception of depth and distance.

Depth

The perceived distance from the observer to a point in space, contributing to the three-dimensional quality of visual perception.

Timbre

The quality of a sound that distinguishes it from other sounds of the same pitch and volume.