One Avenue by Which a Loss of Confidence in One

question 67

Multiple Choice

One avenue by which a loss of confidence in one financial institution spreads to another financial institution is through:

• A) a steep decline in asset prices driven by fire sales to restore liquidity.
• B) a sharp decline in interest rates to compensate for added risk.
• C) an increase in government deposit-insurance coverage.
• D) a rapid slowdown in the withdrawal of deposits.

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Definitions:

Standard Deviation

A measure that quantifies the amount of variation or dispersion of a set of data values.

Histograms

Graphical representations of the distribution of numerical data, where the data is grouped into bins or intervals.

Graphical Techniques

The use of plots, charts, and graphs to visualize, interpret, and analyze data.

Distribution

In statistics, it refers to the way in which values of a variable or a set of variables are spread or dispersed across a range of values.