The Net Worth of a Bank Is the Difference Between

question 72

Multiple Choice

The net worth of a bank is the difference between the

• A)value of retained earnings and the provision for loan losses.
• B)market value of assets and the market value of liabilities.
• C)book value of assets and book value of liabilities.
• D)rate-sensitive assets and rate-sensitive liabilities.

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Definitions:

Operating Activities

Transactions and events that impact the net income of a business, primarily related to its core operations.

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement, starting with net income and adjusting for non-cash transactions.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Statement of Cash Flows

A financial report summarizing the amount of cash and cash equivalents entering and leaving a company.