Assume you are presented with the following data regarding an FI's asset and liability values: $$\begin{array} { | l | l | }
\hline \text { Bookvalue of assets } & \$ 50000 \
\hline \text { Bookvalue of liabilities } & \$ 42000 \
\hline \text { Market value of assets } & \$ 48000 \
\hline \text { Market value of liabilities } & \$ 45000 \
\hline
\end{array}$$ Which of the following statements is true?

Question

Assume you are presented with the following data regarding an FI's asset and liability values: $$\begin{array} { | l | l | } 
\hline \text { Bookvalue of assets } & \$ 50000 \
\hline \text { Bookvalue of liabilities } & \$ 42000 \
\hline \text { Market value of assets } & \$ 48000 \
\hline \text { Market value of liabilities } & \$ 45000 \
\hline
\end{array}$$ Which of the following statements is true?

Quizplus · Accepted Answer

Net worth of the FI is calculated as book value of assets minus book value of liabilities. 
So, the net worth of the FI = $50000 - $42000 = $8000
However, if we calculate net worth using market values, then net worth of the FI = market value of assets minus market value of liabilities.
So, the net worth of the FI = $48000 - $45000 = $3000
Therefore, the correct statement is option C - "The net worth of the FI is $3000."

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