Final answer:
Net worth is calculated by subtracting liabilities from assets. Assets are valued items owned, while liabilities represent debts owed.
Step-by-step explanation:
Net worth is calculated by subtracting liabilities from assets. An asset is something of value that is owned, like cash or a home, and can be used to produce something. In contrast, a liability is a debt or something you owe, such as a mortgage for a home you've purchased. Therefore, to find the net worth, you take the value of all the assets you own and subtract any debts or liabilities you have. In the context of a bank's balance sheet, assets would include reserves, loans made to customers, and securities like U.S. treasury bonds, while liabilities include deposits made by customers and any other debts. The net worth, which is also referred to as bank capital, is crucial for determining the financial health of an individual or institution.In the context of the options provided, the correct answer is: a. assets, because net worth equals assets minus liabilities.