Pixar Bank has the following balance sheet:AssetsCash21,000Liabilities and EquityDemand Deposits550,000Short-term Securities369,000Interbank Borrowed151,000LoansTotal400,000Equity790,000Total89,000790,000Pixar Bank's largest customer decides to exercise a $10,000 loan commitment. If the bank chooses to meet this loan commitment using purchased liquiditymanagement techniques, which of the following correctly describes the balance in each account after the transaction?Select one:O a. Loans $410,000 and Funds Borrowed = $161,000O b. Loans = $400,000 and Funds Borrowed = $161,000О с.Loans $410,000 and Equity = $99,000O d. None of the abovee.Cash $11,000 and Loans = $410,000

Answer: Option (A) Purchased liquidity means borrowing the required funds from financial markets or…

Answered: Pixar Bank has the following balance…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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The T-account below represents assets and liabilities for a bank. Use the T-account to calculate the bank's loans Loans Bonds Reserves Provide your answer below: million Assets ? $18 million $5 million Liabilities + Net Worth Deposits Net Worth $12 million $13 million
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