Assume That a Bank's Market Value of Assets Is $200

question 5

Multiple Choice

Assume that a bank's market value of assets is $200, the market value of its contingent assets is $50, the market value of its liabilities is $180 and the market value of its contingent liabilities is $60.What is the value of this bank's net worth?

• A)$200 + $180 - $50 - $60 = $270
• B)$180 - $200 + $50 + $60 = $90
• C)$200 - $180 + $50 - $60 = $10
• D)$200 - $180 - $50 + $60 = $30

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Definitions:

Regressive Tax

A taxation mechanism where the tax rate effectively decreases as the taxable amount (income or assets) increases, placing a higher relative burden on lower earners.

Investment

Placing capital into assets or projects with the aim of generating growth, returns, or appreciation over time.

Shares

Units of ownership interest in a corporation or financial asset, representing a proportion of the company's capital.

Factory

A building or set of buildings where products are manufactured or assembled primarily by machine.