When you have $1,000 in a savings account at a bank:
A. both you and the bank now have a financial asset of $1,000.
B. the bank holds a financial asset of $1,000 and you hold a financial liability of $1,000.
C. both you and the bank now have a financial liability of $1,000.
D. the bank holds a financial liability of $1,000 and you hold a financial asset of $1,000.
Answer: D
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You earn $500 a month, currently have $200 in currency, $100 in your checking account, $2,000 in your savings accounts, $3,000 worth of illiquid assets and $1,000 of debt. You have
A) money = $2,300, annual income = $6,000, and wealth = $5,000. B) money = $300, annual income = $6,000, and wealth = $4,300. C) money = $300, annual income = $6,000, and wealth = $5,000. D) money = $200, annual income = $500, and wealth = $4,300.
A stand-by letter of credit issued by a bank is __________ of that bank
A) an asset B) a liability C) technically both an asset and a liability D) neither an asset nor a liability