The Primary Difference Between the "Payoff" and the "Purchase and Assumption

question 88

Multiple Choice

The primary difference between the "payoff" and the "purchase and assumption" methods of handling failed banks is

• A)that the FDIC guarantees all deposits when it uses the "payoff" method.
• B)that the FDIC guarantees all deposits when it uses the "purchase and assumption" method.
• C)that the FDIC is more likely to use the "payoff" method when the bank is large and it fears that depositor losses may spur business bankruptcies and other bank failures.
• D)that the FDIC is more likely to use the purchase and assumption method for small institutions because it will be easier to find a purchaser for them compared to large institutions.

---

Definitions:

Resistance

This term can denote opposition or defiance against an opposing force or authority, often used in historical and political contexts.

Underground Style

Typically refers to a subversive or non-mainstream fashion or trend, often associated with music, art, or cultural movements.

Colin Powell

An American military general and statesman who served as the first African American U.S. Secretary of State, known for his leadership during the Persian Gulf War.

Condoleezza Rice

An American political scientist and diplomat who served as the 66th United States Secretary of State, and was the first African American woman to hold the post.