Suppose a bank is operating with a leverage ratio of 20 . What is the maximum decrease in the market value of assets before the bank becomes insolvent?


A leverage ratio of 20 implies each percentage change in assets results in a 20% change in capital. Therefore, a 5% decrease in the market value of assets will result a 100% decrease in capital. This results in a situation of insolvency - bank capital will be zero.

Economics

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A. First-degree price discrimination B. Second-degree price discrimination C. Third-degree price discrimination D. Regular price discrimination

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Historically, the U.S. government seems to have ________

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Added expenditures in the circular flow that are not paid for out of domestic resource income are known as

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Economics