When a Depository Institution Pools Risk, It

question 556

Multiple Choice

When a depository institution pools risk, it

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

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Definitions:

AGI Deduction

Deductions from gross income that occur before calculating the taxable income, specifically affecting the adjusted gross income on a tax return.

Health Insurance

A type of insurance coverage that typically pays for medical, surgical, prescription drug, and sometimes dental expenses incurred by the insured.

Self-Employed

This term describes individuals who work for themselves, either by running their own business or as independent contractors, rather than being employed by someone else.

Gross Income

Gross Income is the total income from all sources before any deductions or taxes are applied.