true/false

1. The fundamental accounting equation that is represented on a balance sheet is that equity is equal to the sum of assets plus liabilities.

2. A banks holdings of U.S. Treasury securities would be referred to as secondary reserves.

3. To put it briefly, banks are in the business to borrow long and lend short.

4. While a bank could call in loans to help replenish its reserves, this is likely to antagonize borrowers and may hurt the banks long term interest.

5. The difference between the Safety Bank and the Shaky Bank is that the latter (the Shaky Bank) didnt have enough equity to sustain the losses arising from the non-payment of loans.