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The Bank of Your Dreams has a simple balance sheet. The figures are in millions of dollars as follows: Assets Liabilities and Equity Cash $
The Bank of Your Dreams has a simple balance sheet. The figures are in millions of dollars as follows: Assets Liabilities and Equity Cash $ 300 Deposits $5,000 Securities 1,000 Other liabilities 500 Loans 5,000 Equity 800 Total assets 6,300 Total liabilities and equity 6,300 Although the balance sheet is simple, the banks manager encounters a liquidity challenge when depositors withdraw $500 million. If the asset conversion method is used and securities are sold to cover the deposit drain, by how much the total assets will change?
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