An Activity Performed by Commercial Banks That Is Not Performed

question 87

Multiple Choice

An activity performed by commercial banks that is not performed by insurance companies is

• A) functioning as financial intermediaries.
• B) creating financial obligations against themselves.
• C) accepting deposits and offering checking accounts.
• D) allocating financial resources between borrowers and lenders.

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Definitions:

Dividend Payout Ratio

A financial metric that measures the percentage of a company's earnings paid out to shareholders as dividends.

Earnings Per Share

Earnings per share (EPS) is a company's profit divided by the outstanding shares of its common stock, indicating the company's profitability on a per-share basis.

Share Price

The present cost for purchasing or selling a single unit of a corporation's stock.

Constant-Growth DDM

A dividend discount model that assumes dividends grow at a constant rate in perpetuity, used to estimate the value of a stock.