An Example of Economies of Scale in the Provision of Financial

question 78

Multiple Choice

An example of economies of scale in the provision of financial services is

• A) investing in a diversified collection of assets.
• B) providing depositors with a variety of savings certificates.
• C) spreading the cost of borrowed funds over many customers.
• D) spreading the cost of writing a standardized contract over many borrowers.

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Definitions:

Par Value

The nominal or face value of a stock or bond as stated by the issuing company, not necessarily reflecting its market value.

Statutory Restriction

Legal limitations or constraints, often imposed by law, that dictate how an organization can operate or use certain resources.

Contractual Restriction

A limitation or condition explicitly outlined in a contract that dictates the actions that parties to the contract are obligated to follow or are prohibited from taking.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period, providing insights into its profitability and operational efficiency.