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If a Bank Has Assets of $5 Billion and Liabilities

Question 32

Multiple Choice

If a bank has assets of $5 billion and liabilities of $4.8 billion:


A) its equity equals $200 million.
B) its equity equals -$800 million.
C) it faces a solvency crisis.
D) its equity equals -$800 million and it faces a solvency crisis.

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