A bank's balance sheet equates the value of total assets to the sum of total liabilities...

A bank's balance sheet equates the value of total assets to the sum of total liabilities and equity capital. (T/F)

Negotiable certificates of deposit (CDs) do not have an active secondary market. (T/F)

In a bankruptcy situation, the Federal Reserve acts as the liquidator of the bank. (T/F)

International expansion for financial institutions coming from highly integrated countries maximizes the risk diversification. (T/F)

The financial crisis of 2008, demonstrated that activities such as trading in financial futures and interest-rate swaps have low risk. (T/F)

Solutions

Expert Solution

A bank's balance sheet equates the value of total assets to the sum of total liabilities and equity capital

TRUE, as ASSETS = CAPITAL + LIABILITIES

Negotiable certificates of deposit (CDs) do not have an active secondary market

FALSE, as they can be dealt in secondary market.

In a bankruptcy situation, the Federal Reserve acts as the liquidator of the bank.

FALSE, court acts as the liquidator of the bank.

The financial crisis of 2008, demonstrated that activities such as trading in financial futures and interest-rate swaps have low risk.

FALSE

jeff jeffy answered 1 year ago

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