Economies of Scale Refer to an FI's Ability to

question 65

Multiple Choice

Economies of scale refer to an FI's ability to

• A)lower its average costs of operations by expanding its output of financial services.
• B)generate cost synergies by producing more than one output with the same inputs.
• C)understand each risk and its interaction with other risks.
• D)finance its assets completely with borrowed funds.
• E)moderate the long-tailed downside risk of the return distribution.

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Definitions:

Payee

The individual or entity to whom a payment is to be made or who will receive the payment.

Subsequent Holder

An individual or entity that acquires a negotiable instrument after it has been initially issued.

Simple Contracts

Contracts that can be oral or written, not formalized by seal, and recognized by courts if they meet basic requirements like offer, acceptance, and consideration.

Negotiable Instruments

Written documents guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer usually not named.