Problem 5 Consider A Different Balance Sheet Which Reflects A Higher Level Of Equity Assets Reserves Loans 200 800 Li 1 (58.96 KiB) Viewed 10 times
Problem 5 Consider A DIFFERENT balance sheet which reflects a higher level of equity: Assets Reserves Loans $200 $800 Liabilities Deposits $900 Equity $100 Suppose now 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 $70 b) The value of equity is $60 c) The value of equity is $50 d) The value of equity is $40 e) None of the above
Problem 6 Consider the balance sheet in problem 5, which reflects a higher level of equity: Assets Reserves Loans $200 $800 Liabilities Deposits $900 Equity $100 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 $20 b) The value of equity is $0 c) The value of equity is -$20 d) The value of equity is -$40 e) None of the above
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