Reserve - $10 Million, Loans - $90 Million. Deposits - $90 Million, Bank Capital - $10 Million

1. Bank XYZ can withstand a 5% drop in loan value and still be well capitalized. Well capitalized means an Equity/Asset ratio of 8%. True False

2. Bank XYZ can withstand a 5% drop in loan value and still be well capitalized. Well capitalized means an Equity/Asset ratio of 6%.

   True

   False