Consider the simple bank balance sheet shown below (amount in millions of $). Suppose, subsequently, depositors unexpectedly withdraw $80 million. Assume the bank is unable to borrow new funds and will have to liquidate all of its reserves to meet its payment obligation. For any uncovered amount, the bank will be forced to sell loans work $12 million in a fire sale. Please reconstruct the bank balance sheet after the withdrawal. What will be the new total assets and what will be the new equity value? Hint: Watch video for analysis.

ASSETS		LIABILITY & EQUITY
Cash	70	Deposits	300
Loans	280	Equity (net worth)	50
Total assets	350	Total debt & equity	350

Question 6 options:

1)	Total assets = $268 million. Equity = $48 million

2)	Total assets = $270 million. Equity = $48 million

3)	Total assets = $270 million. Equity = $40 million

4)	Total assets = $268 million. Equity = $38 million