A Failed Bank Recovery Of Insured and Uninsured Deposits

Question

The following market value balance sheet of a failed bank ($ millions)

Assets

$400

Insured Deposits

$200

 

 

Uninsured Deposits

$100



1. What is the market value of capital?
    a.    $200 million.
    b.    â€‘$200 million.
    c.    $0.
    d.    $400 million.
    e.    $600 million.
2. If the insured depositor transfer resolution method is utilized, what is the cost to insured depositors of bank failure resolution?
    a.    $0.
    b.    -$200 million.
    c.    $67 million.
    d.    $133 million.
    e.    $200 million.
3. If the insured depositor transfer resolution method is utilized, what is the cost to uninsured depositors of bank failure resolution?
    a.    $0.
    b.    -$200 million.
    c.    $67 million.
    d.    $133 million.
    e.    $200 million.

4. If the insured depositor transfer resolution method is utilized, what is the cost to the FDIC of bank failure resolution?
    a.    $0.
    b.    -$200 million.
    c.    $67 million.
    d.    $133 million.
    e.    $200 million.

Summary

The question belongs to Finance and it is about a failed bank and various questions about it such as market value of capital, what it the amount that insured and uninsured depositors can expect from the bank, etc have been answered in the solution.

Total Word Count 50

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Comments

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