Question

Stealth bank holds deposits of $600 million. It holds reserves of $30 million and government bonds worth $80 million. The current market value of the bank's loans is $400 million. What is the value of the bank’s total liabilities?

A. $600 million
B. $110 million
C. $200 million
D. $90 million

Answer 1

D

Step-by-step explanation:

Bank Deposit (Liability )= $600m

Reserve (Asset) = $30m

Government bond (Asset)=$80m

Bank Loan (Asset) = $400m

Total Asset = $(30+80+400)=$510m

Total liabilities = $m(600-510) = $90m

Answer 2

A.$600 million

Step-by-step explanation:

Deposits are always banks liabilities as the bank is custodian of funds on behalf of its clients.