34) Subprime assets lost value rapidly between 2007 and 2009. This lowered the value of banks...

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34) Subprime assets lost value rapidly between 2007 and 2009.This lowered the value of banks that had exposure to these assetsand financial institutions that had exposure to banks that wereexposed to subprime risk. Since the assets were hard to value theywere not acceptable as collateral. This made banks illiquid andthis scared away the suppliers of bank capital. A liquidity crisisturned into a credit crisis for many financial institutions such asWAMU, Wachovia, Lehman and others.
it is True False
30 The market value of a bank’s net worth is defined as thevalue of its assets less the value of its liabilities. If a bank’sassets lose value and its liabilities do not change in value, thebank’s net worth will decline.
it is True False
31 ) A bank is insolvent when:
value of its assets exceed its liabilities.
value its liabilities exceed its assets.
value of its assets increase in value.
value of its capital exceeds its liabilities.

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34) Subprime assets lost value rapidly between 2007 and 2009.This lowered the value of banks that had exposure to these assetsand financial institutions that had exposure to banks that wereexposed to subprime risk. Since the assets were hard to value theywere not acceptable as collateral. This made banks illiquid andthis scared away the suppliers of bank capital. A liquidity crisisturned into a credit crisis for many financial institutions such asWAMU, Wachovia, Lehman and others.it is True False30 The market value of a bank’s net worth is defined as thevalue of its assets less the value of its liabilities. If a bank’sassets lose value and its liabilities do not change in value, thebank’s net worth will decline.it is True False31 ) A bank is insolvent when:value of its assets exceed its liabilities.value its liabilities exceed its assets.value of its assets increase in value.value of its capital exceeds its liabilities.

		value of its assets exceed its liabilities.
		value its liabilities exceed its assets.
		value of its assets increase in value.
		value of its capital exceeds its liabilities.