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

question 46

Multiple Choice

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

• A) that the CDIC guarantees all deposits when it uses the "payoff" method
• B) that the CDIC guarantees all deposits when it uses the "purchase and assumption" method
• C) that the CDIC 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 CDIC 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

Distinguish between short-form mergers and other corporate combinations.

Understand the concept of a subsidiary corporation and the implications of ownership in corporate combinations.

Recognize the legal distinctions between the surviving and disappearing entities in mergers and consolidations.

Learn about the statutory provisions that apply to domestic and foreign corporations in the context of corporate combinations.