Assume the value of an FI's average loans is $300 and the value of its average deposits is $400.The FI has liquid assets of $100.What is the FI's financing requirement?
A)$400 - $300 - $100 = $0
B)$300 - $400 - $100 = -$200
C)$400 - $300 + $100 = $200
D)$300 - $400 + $100 = $0

Question

Quizplus · Accepted Answer

The financing requirement is calculated by subtracting the value of average deposits and adding the liquid assets to the value of average loans. Thus, $300 (loans) - $400 (deposits) + $100 (liquid assets) = $0.

Assume the Value of an FI's Average Loans Is $300