If a Bank Has Liabilities Exceeding Its Net Worth

question 45

Multiple Choice

If a bank has liabilities exceeding its net worth:

• A)it will not be able to meet its desired reserve ratio.
• B)it is considered to be insolvent.
• C)it most likely is a heavy borrower from the Bank of Canada.
• D)none of the above is necessarily true.

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Definitions:

Percutaneous Transluminal Coronary Angioplasty

A minimally invasive procedure to open up blocked coronary arteries, allowing blood to circulate to the heart muscle.

Coronary Artery Disease

A condition characterized by the narrowing of the coronary arteries due to the buildup of plaque, leading to reduced blood flow to the heart.

Cardiac Output

The volume of blood the heart pumps through the circulatory system in one minute.

LDL

Low-density lipoprotein, often referred to as "bad" cholesterol, which can build up in the walls of arteries leading to heart disease.