When a bank has short-term liabilities that are greater than its short-term assets,but overall its assets are greater than its liabilities,the bank is considered:
A) solvent.
B) insolvent.
C) liquid.
D) illiquid.

Question

Quizplus · Accepted Answer

The bank is illiquid because it cannot meet its short-term obligations with its current short-term assets. However, since its overall assets are greater than its liabilities, it is still solvent.

When a Bank Has Short-Term Liabilities That Are Greater Than