In the Event of a Bank Run, Depositor Claims on the Bank

question 16

True/False

In the event of a bank run, depositor claims on the bank are satisfied on a pro rata basis.

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Definitions:

Certificate of Limited Partnership

A legal document filed with a governmental body to form a limited partnership.

Oral Agreement

A contract that has been agreed to by speaking rather than in writing. Although legally binding, they are often harder to prove in court.

Winding Down

The process of gradually reducing operations or activities in a business, often in preparation for its closure.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another when managing assets or financial matters.