When a bank is failing, it may sell off some of its assets to try and keep its equity (net worth) positive. However, this move can actually make its equity fall. This is because a bank selling assets makes the [Select] and the price of those asset ✓ [Select] go up go down stay the same

When a bank is failing, it may sell off some of its assets to try and keep its equity (net worth) positive. However, this move can actually make its equity fall. This is because a bank selling assets makes the [Select] and the price of those asset ✓ [Select] go up go down stay the same

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

When a bank is failing, it may sell off some of its assets to try and keep its
equity (net worth) positive. However, this move can actually make its equity
fall.
This is because a bank selling assets makes the [Select]
and the price of those asset
✓ [Select]
go up
go down
stay the same

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