A Bank with Assets Worth Less Than Liabilities Is Said

question 49

Multiple Choice

A bank with assets worth less than liabilities is said to be _____, while a bank without adequate funds immediately available to make promised payments is said to be _____.

• A) inflated; inverted
• B) inverted; inflated
• C) insolvent; illiquid
• D) illiquid; insolvent

---

Definitions:

Average Total Assets

The mean value of all the assets owned by a company over a specific time period.

Return on Total Assets

A financial ratio that measures the efficiency of a company's use of its assets to generate profit, calculated by dividing net income by total assets.