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Posted: **Sun Jul 03, 2022 1:06 pm**

: Problem 2 Consider A Bank That Has The Following Balance Sheet Assets Reserves Loans 200 800 Liabilities Deposits 96 1 (56.31 KiB) Viewed 15 times

Problem 2 Consider a bank that has the following balance sheet: Assets Reserves Loans $200 $800 Liabilities Deposits $960 Equity $40 Suppose some of the loans made were "bad", so the value of the bank's loans goes down by 5%. Which of the following statements is true a) The value of equity is $30 b) The value of equity is $20 c) The value of equity is $10 d) The value of equity is $0 e) None of the above
Problem 3 Consider the same balance sheet as in problem 3: Liabilities Deposits $960 Equity $40 Assets Reserves Loans $200 $800 Suppose now some of the loans made were "good", so the value of the bank's loans goes up by 5%. Which of the following statements is true a) The value of equity is $50 b) The value of equity is $60 c) The value of equity is $70 d) The value of equity is $80 e) None of the above
Problem 4 Consider the same balance sheet as in problem 3: Assets Reserves Loans $200 $800 Liabilities Deposits $960 Equity $40 Suppose now some of the loans made were "bad", so the value of the bank's loans goes down by 10%. Which of the following statements is true a) The value of equity is -$40 b) The value of equity is -$30 c) The value of equity is -$20 d) The value of equity is -$10 e) None of the above