Pooling of Risk Occurs When Depository Institutions

question 425

Multiple Choice

Pooling of risk occurs when depository institutions

• A) make assets more liquid.
• B) specialize in loaning only to good borrowers.
• C) bring lenders together.
• D) lend to a variety of different borrowers.

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Definitions:

Narrow Jobs

Positions characterized by a highly specialized or limited set of tasks and responsibilities, requiring specific skills or knowledge.

Structural Variables

Aspects of an organization's setup, such as its hierarchy, departmentalization, and distribution of authority, that influence its functioning and culture.

Managerial Strategy

The set of actions, plans, and policies devised by management to achieve competitive advantage and meet organizational goals.

Differentiation

The process of distinguishing a product or service from others to make it more attractive to a particular target market.