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The following information is for the next four questions. As a result of loan write-offs, Bank A has to be liquidated by the regulators. The

The following information is for the next four questions. As a result of loan write-offs, Bank A has to be liquidated by the regulators. The book value of the assets and liabilities of the bank is as follows (in millions): On the asset side, Loans of $170; and, on the liability side, Insured Deposits of $100, Uninsured Deposits of $50, and Equity of $20. However, the market value of the loans has been estimated at $120 million.

A. What is the current net worth of the bank?

B. What is the cost to the insured depositors if the payoff method is used by the regulators to resolve the bank failure?

C. What is the cost to the uninsured depositors if the payoff method is used by the regulators to resolve the bank failure?

D. What is the cost to the FDIC if the payoff method is used by the regulators to resolve the bank failure?

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