Which of the Following Did NOT Significantly Exacerbate the Banking

question 13

Multiple Choice

Which of the following did NOT significantly exacerbate the banking crisis of the early 1930s?

• A)The Fed's inability to lend against anything other than good commercial loans
• B)The large number of small, poorly diversified banks
• C)The large number of rural banks that held agricultural loans during a time of falling commodity prices
• D)The large amount of fraud carried out by bank managers

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Definitions:

Internal Rate

Short for Internal Rate of Return (IRR), a metric used in capital budgeting to estimate the profitability of potential investments.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.

Useful Life

The estimated lifespan of a fixed asset, during which it can be expected to contribute to company operations.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, used in discounting to account for the time value of money.