The Experience of Disintermediation in the Banking Industry Illustrates That

question 118

Multiple Choice

The experience of disintermediation in the banking industry illustrates that

• A)more regulation of financial markets may avoid such problems in the future.
• B)banks are unable to remain competitive with other financial intermediaries.
• C)consumers no longer desire the services that banks provide.
• D)markets invent alternatives to costly regulations.

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Definitions:

Preemptive Rights

The right of existing shareholders to maintain their proportional ownership in a company by purchasing a proportional number of new shares before the company offers them to the public.

Treasury Stock

Treasury Stock refers to shares that were issued and subsequently repurchased by the issuing company, reducing the amount of outstanding stock on the open market.

Authorized Stock

The total number of shares a corporation is legally allowed to issue, as defined in its articles of incorporation.

Treasury Stock

Shares that were issued by a company and later reacquired. These shares do not pay dividends or have voting rights while held by the company.