Which of the Following Is NOT an Economic Benefit of Depository

question 349

Multiple Choice

Which of the following is NOT an economic benefit of depository institutions?

• A) They pool risk
• B) They borrow long and lend short
• C) They reduce the cost of monitoring borrowers
• D) They create liquidity

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Definitions:

Business Combination

The process of uniting multiple businesses into one single entity, often through acquisitions or mergers.

Unrealized Profits

Gains on assets that have appreciated in value but have not been sold, and therefore, the gains are not reflected in the financial results as actual income.

Upstream Sales

Transactions in which a subsidiary sells goods or services to its parent company, often analyzed for transfer pricing and tax considerations.

Unrealized Profits

Profits that have been generated on paper through investments and other financial instruments but have not yet been realized through actual transactions.