The Contagion Effect

question 20

Multiple Choice

The contagion effect

• A)stems from the positive correlation in FI returns.
• B)results when interest rate risk increases credit risk and liquidity risk exposures.
• C)occurs when liquidity risk problems at bad banks damages well-run banks.
• D)occurs when a computer virus infects the computerized electronics payments systems Fedwire and CHIPS.
• E)is completely eliminated by government provided deposit insurance against bank runs.

---

Definitions:

Correct Sentence

A grammatically accurate statement that conveys a complete thought with proper structure.

Plural Abbreviation

Abbreviations that are modified to indicate that they represent more than one object, person, or concept, often by adding an "s".

Excellent Job

A phrase used to commend someone on their superior performance or completion of work in an outstanding manner.

Abbreviated Correctly

The act of shortening words or phrases accurately and according to standard conventions.