If a bank's net worth is negative, then the bank definitely is
A) liquid.
B) insolvent.
C) illiquid.
D) solvent.

Name: If a bank's net worth is negative, then the bank definitely is A) liquid. B) insolvent. C) illiquid. D) solvent.
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Question

Quizplus · Accepted Answer

When a bank's net worth is negative, it means its liabilities exceed its assets, which is a definition of insolvency. Insolvency indicates that the bank cannot meet its long-term financial obligations.

If a Bank's Net Worth Is Negative, Then the Bank