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Instructor-created question E Question Help In the Choice and Consequence box on Asset Price Fluctuations and Bank Failures, the authors discuss the relationship between the

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Instructor-created question E Question Help In the "Choice and Consequence" box on "Asset Price Fluctuations and Bank Failures, the authors discuss the relationship between the prices of things like oil and real estate and the solvency of lending institutions like banks Consider the two scenarios below For each of the following balance sheets, supply the missing entries and then answer the questions that tollow Assume that Securitas Bank is a large bank in the country of Hyponatremia The bank's only assets and liabilities at the beginning of the year are given in the following balance sheet Securitas Bank Balance Sheet Assets Liabilities and Stockholders' Equity onecout s 280 s 70 28Demand deposits Reserves and cash equivalents Long term investments Total assets 420 Borrowing from other banks Stockholders equity Assume now that due to an economic downturn, the value the bank's long term investments declines by 20% Show the resulting situation on the Securitas Bank balance sheet Secizitas Bank Balance Sheet Assets Liabilities and Stockholders Equity Reserves and cash equivalents 28Demand deposits Long-term investments Total assets Borrowing from other banks Stockholders' equity S 280 S 70 Enter any number in the edit flields and then click Check Answer Securitas Bank Balance Sheet Liabilities and Stockholders' Equity Demand deposits Borrowing from other banks Stockholders' equity : Assets s 280 Reserves and cash equivalentss Long-term investments Total assets 28 420 $ 70 L Assume now that due to an economic downturn, the value the bank's long-term investments decines by 20% Show the resulting situation on the Secunitas Bank balance shoot Securitas Bank Balance Sheet Assets Reserves and cash equivalents$ Long-term investments Total assets Liabilities and Stockholders' Equity Demand deposits Borrowing from other banks Stockholders' equity 28 s 280 s 70 Given that Securitas Bank is a large bank, the government may consider it Too big to fail" since O A. it can sue the government on behalf of its many depositors O B. its failure may harm the wider financial system and potentially the entire economy O C. it ikoly has influential friends in the highest levels of government O D. it pays signiticant taxes to the national treasury Enter any number in the edit fleids and then click Check

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