The following market value balance sheet of a failed bank ($ millions) $$\begin{array} { | l | l | l | l | }
\hline \text { Assets } & 400 & \text { Insured Deposits } & \$ 200 \
\hline & & \text { Uninsured Deposits } & \$ 400 \
\hline
\end{array}$$
-What is the market value of capital?

Question

The following market value balance sheet of a failed bank ($ millions) $$\begin{array} { | l | l | l | l | } 
\hline \text { Assets } & 400 & \text { Insured Deposits } & \$ 200 \
\hline & & \text { Uninsured Deposits } & \$ 400 \
\hline
\end{array}$$
-What is the market value of capital?

Quizplus · Accepted Answer

The market value of capital is calculated as the difference between the total assets and total liabilities (insured and uninsured deposits). Here, total assets are $400 million, and total liabilities are $600 million ($200 million insured + $400 million uninsured), resulting in a market value of capital of -$200 million.

The Following Market Value Balance Sheet of a Failed Bank