Assets Liabilities and Net Worth Background for questions 25 and 26. The table to the left is Loans 100 Deposits 200 the balance sheet for the Reserves at Fed 50 Lincoln National Bank; the dollar amounts are in millions. Mortgage-backed The acronym "Fed" refers to the securities 80 Net worth 30 Federal Reserve Bank. 25. The reserve ratio (indicating the required reserves) governing the Lincoln National Bank is 0.10. Two parts to this question: (1) Is this bank solvent? (2) What are its excess reserves? a. Yes ; No excess reserves. b. Yes ; Excess reserves of 20. C. Yes ; Excess reserves of 30. d. No ; No excess reserves. e . No ; Excess reserves of 20. 26. During the financial crisis, mortgage-backed securities were discovered to be worth less than when first purchased. If the Lincoln National Bank discovers that its mortgage-back securities are worth 40 instead of 80, what will happen to its balance sheet? a. Deposits reduced by 40 b. Net worth reduced by 40 c. Net worth reduced by 30, Deposits reduced by 10. d. Loans rise by 40 e. Reserves at the Fed rise by 40