A bank with assets less than liabilities is said to be , while a bank without adequate funds immediately available to make promised payments is said to be _.
A)inflated; inverted
B)inverted; inflated
C)insolvent; illiquid
D)illiquid; insolvent

Question

Quizplus · Accepted Answer

An inverted bank is one where liabilities are greater than assets, while an inflated bank means that the value of assets has been overstated. An insolvent bank is one that has a negative net worth or where liabilities are greater than assets. An illiquid bank means that it does not have enough immediate funds available to make promised payments. Therefore, the correct option is C.

A Bank with Assets Less Than Liabilities Is Said to Be