If the market value of what it has lent is less than the market value of what it has borrowed, a financial institution's net worth is ________ and it is ________
A) negative; illiquid and insolvent
B) positive; illiquid and insolvent
C) negative; insolvent but not necessarily illiquid
D) positive; insolvent but not necessarily illiquid
E) negative; illiquid but not necessarily insolvent
C
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A survey of earnings contains an unusually high fraction of individuals who state their weekly earnings in 100s, such as 300, 400, 500, etc. This is an example of
A) errors-in-variables bias. B) sample selection bias. C) simultaneous causality bias. D) companies that typically bargain with workers in 100s of dollars.
An example of moral hazard is
a. workers working diligently even though the boss is not looking b. health care insured dieting and exercising c. drivers of safer cars turning their phones off before driving d. borrowers investing their loan proceeds differently than the bank requires