Question : The net worth of any bank is equal to_____.
Option 1: liabilities - assets
Option 2: (reserves + loans) - liabilities
Option 3: interest + liabilities
Option 4: (reserves + loans)+ liabilities
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Correct Answer: (reserves + loans) - liabilities
Solution : The correct option is - liabilities - assets.
The net worth of a bank is defined as its total assets minus its total liabilities. The difference between a bank's total assets and total liabilities is the bank's net worth. Put another way, it stands for the bank's remaining stake in its assets after all of its liabilities and commitments have been subtracted.
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