A Bank Run Is Said to Have Occurred When

question 24

Multiple Choice

A bank run is said to have occurred when

• A) depositors realise that a particular bank is paying higher interest than its competitors and a substantial number of them rush to deposit their money in it.
• B) a substantial number of depositors suspect that a bank may go bankrupt and withdraw their deposits.
• C) a bank experiences a series of defaults on its loans.
• D) a bank converts its loans into deposits.

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Definitions:

Type I Error

Mistakenly refusing a true null hypothesis, popularly known as a "false positive."

Nominal Data

Data that are categorized into distinct groups without implying any ranked order among them.

Confidence Level

The probability, expressed as a percentage, that the result of an experiment or study will fall within a specified range of values.

Confidence Interval

An interval of values, calculated from samples, that probably includes an undetermined population statistic, at a designated level of certainty.