1) Bank XYZ can withstand a 5% drop in loan value and still be “well capitalized”. Well capitalized means an Equity/Asset ratio of 6%.
Is this true or false?
2) Bank holding companies that own significantly undercapitalized banks are limited in the amount of dividends they can pay.
Is this true or false?
3) Banks in the United States were nationalized in the fourth quarter of 2009 because banks were not lending to enough money to keep the economy growing.
Is this true or false?
4) Being adequately capitalized means that a there are sufficient liquid assets on the bank’s balance sheet to meet all expected and unexpected withdrawals of deposits within a time frame of one week.
Is this true or false?