When a Depository Institution Pools Risk, It

question 261

Multiple Choice

When a depository institution pools risk, it

• A) spreads loan losses across many depositors so that no one depositor faces a high degree of risk.
• B) buys short and lends long.
• C) makes loans to just one firm.
• D) borrows reserves from the Federal Reserve.

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Definitions:

Instrumental Aggression

Hurtful behavior that is intended to get something that another person has.

Retaliation

A form of response aimed at returning harm for harm; often used in contexts of conflict or competition, whether personal, legal, or military.

Antisocial Behavior

Behaviors that damage or disregard the welfare of others, frequently breaking societal norms and regulations.

Deliberately

Done consciously and intentionally; often implying careful thought or planning.