What does the book value of a bank's net worth (i.e., equity) equal?

a)The difference between book value of total assets and total liabilities

b)The difference between market value of total assets and total liabilities

c)The sum of book value of short term assets and short term liabilities

d)The sum of book value of total assets and total liabilities

a)Step-by-step explanation

a)The difference between book value of total assets and total liabilities

The net worth of a bank means the total assets minus its total liabilities. The book value of the net worth of a bank is also called equity or capital owned. The bank's equity is said to be the difference between the total assets and total liabilities. Choice 'a' is correct. Market value is the bank's net worth based on outstanding shares. Choice 'b' is incorrect. The other choices in 'c' and 'd' do not apply.