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Assets Bank Assets 100 Liabilities Short-term credit S80 Net Worth Captial $20 Now suppose that the perceived value of the bank's assets falls. If lenders
Assets Bank Assets 100 Liabilities Short-term credit S80 Net Worth Captial $20 Now suppose that the perceived value of the bank's assets falls. If lenders become nervous about the solvency of the bank OA. making loans become riskier but lenders believe in banks and will be willing to provide credit at low interest rates O B. making loans become riskier and lenders will not be as willing to provide credit at low interest rates. O C. making loans is not any riskier so lenders will still be willing to provide credit at low interest rates O D. even though giving the bank a loan is not any riskier, the bank will not have as much collateral to borrow from. Assuming the bank cannot raise additional capital, how can it raise the funds necessary to repay its debt coming due? O A. The bank can issue more stock. O B. The bank can borrow by issuing bonds. OC. The bank must sell some of its assets O D. The bank can give depositers some of their money back. Suppose many banks cannot raise additional capital and hold similar assets, given this, it is likely that the value of the assets will and make lenders more nervous and to lend
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