The Least Cost Resolution Strategy of FDICIA Requires Failure Resolution

question 39

Multiple Choice

The least cost resolution strategy of FDICIA requires failure resolution alternatives for all banks to be evaluated on a

• A)historical cost basis.
• B)opportunity cost basis.
• C)market value basis.
• D)present value basis.
• E)replacement cost basis.

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Definitions:

Mutually Exclusive

Mutually exclusive is a statistical term describing two or more events that cannot occur simultaneously, often used in decision making or project selection scenarios.

Internal Rate of Return (IRR)

The Internal Rate of Return (IRR) is a financial metric used to evaluate the profitability of potential investments by calculating the discount rate that makes the net present value of all cash flows from the investment equal to zero.

Straight-Line Depreciation

A calculation for distributing the expense of a tangible asset over its lifespan in uniform annual payments.