Suppose ABC Bank has the following balance sheet items: checkable deposit received of $525 million, bank capital
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Question:
Suppose ABC Bank has the following balance sheet items: checkable deposit received of $525 million, bank capital of $100 million, mortgage loans made of $500 million, and securities purchased of $50 million.
A. If ABC Bank is now insolvent, what option/s are still available to the bank to keep it from failing? Explain briefly.
b. If the CFO of ABC Bank determines that it may be falling short of meeting its bank capital requirements, what three measures can it do?
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