The following table shows the market value balance sheet of a failed bank ($ millions): $$\begin{array} { | l | l | l | l | }
\hline \text { Assets } & 400 & \text { Insured Deposits } & \$ 200 \
\hline & & \text { Uninsured Deposits } & \$ 400 \
\hline
\end{array}$$ What is the market value of capital?

Question

The following table shows the market value balance sheet of a failed bank ($ millions): $$\begin{array} { | l | l | l | l | } 
\hline \text { Assets } & 400 & \text { Insured Deposits } & \$ 200 \
\hline & & \text { Uninsured Deposits } & \$ 400 \
\hline
\end{array}$$ What is the market value of capital?

Quizplus · Accepted Answer

The market value of capital is calculated as Assets - Liabilities. Here, the total liabilities are the sum of insured and uninsured deposits ($200 million + $400 million = $600 million). The assets are $400 million. Therefore, the market value of capital is $400 million - $600 million = -$200 million.

The Following Table Shows the Market Value Balance Sheet of a Failed