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1) When the liabilities of a bank decline in value but the asset value remains...

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Accounting

1) When the liabilities of a bank decline in value but the asset value remains the same the value of the banks equity must decline. True or False? 2)A bank has borrowed $10 million from investors at 10% for 10 years. After two years interest rates begin to increase. This would depress the value of the banks liabilities which would boost the value of the banks equity. True or False? 3)A bank has made many bad loans to real estate developers. Bank managers are now writing down the value of these loans by 50%. This will increase the value of the banks insured deposits. True or False? 4)It is not possible for a bank to be solvent but illiquid. True or False?

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