Problem:
The following market value balance sheet of a failed bank ($ millions)
|
Assets
|
$400
|
Insured Deposits
|
$200
|
|
|
|
Uninsured Deposits
|
$100
|
1. What is the market value of capital?
a. $200 million.
b. $200 million.
c. $0.
d. $400 million.
e. $600 million.
2. If the insured depositor transfer resolution method is utilized, what is the cost to insured depositors of bank failure resolution?
a. $0.
b. -$200 million.
c. $67 million.
d. $133 million.
e. $200 million.
3. If the insured depositor transfer resolution method is utilized, what is the cost to uninsured depositors of bank failure resolution?
a. $0.
b. -$200 million.
c. $67 million.
d. $133 million.
e. $200 million.
4. If the insured depositor transfer resolution method is utilized, what is the cost to the FDIC of bank failure resolution?
a. $0.
b. -$200 million.
c. $67 million.
d. $133 million.
e. $200 million.
Summary
This question is from Finance and it is about a failed bank as well as various questions about it such as market value of capital, what it the amount that insured as well as uninsured depositors can expect from the bank, and so forth have been answered in the solution.