Net worth is equal to a bank's:
A) investments minus deposits.
B) cash plus reserves.
C) deposits plus loans.
D) loans minus capital.
E) total assets minus total liabilities.

Question

Quizplus · Accepted Answer

Net worth is the residual interest in the assets of an entity after deducting liabilities. In other words, it is the difference between total assets and total liabilities. Option E, "total assets minus total liabilities," reflects this definition of net worth, so it is the best choice. The other options may reflect different aspects of a bank's financial position, but they do not accurately represent its net worth.

Net Worth Is Equal to a Bank's