A widespread fall in asset prices means that banks might become
A) insolvent.
B) solvent.
C) illiquid.
D) too liquid.

Name: A widespread fall in asset prices means that banks might become A) insolvent. B) solvent. C) illiquid. D) too liquid.
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Question

Quizplus · Accepted Answer

A widespread fall in asset prices can lead to a decrease in the value of a bank's assets, potentially making the bank's liabilities exceed its assets, thus rendering it insolvent.

A Widespread Fall in Asset Prices Means That Banks Might