Assume you are presented with the following data regarding an FI's asset and liability values: Book value of assets
$50 000
Book value of liabilities
$42 000
Market value of assets
$48 000
Market value of liabilities
$45 000
Which of the following statements is true?

Question

Quizplus · Accepted Answer

To calculate the net worth of the FI, we use the formula:

Net Worth = Book Value of Assets - Book Value of Liabilities

Given the data, the net worth of the FI would be:

Net Worth = $50,000 - $42,000 = $8,000

However, we also have information about the market values of the assets and liabilities. If we calculate the net worth using the market values, we get:

Net Worth = Market Value of Assets - Market Value of Liabilities

Net Worth = $48,000 - $45,000 = $3,000

Therefore, the correct answer is C) The net worth of the FI is $3,000.

Assume You Are Presented with the Following Data Regarding an FI's