Which of the Following Is Not a Reason to Create

question 34

Multiple Choice

Which of the following is not a reason to create large financial holding companies?

• A) Financial holding companies offer a wide array of services under one brand name.
• B) Financial holding companies need only one CEO, one Board of Directors, and one accounting system regardless of size.
• C) Financial holding companies are well diversified so risk is reduced.
• D) Financial holding companies are exempt from having to pay for FDIC insurance on deposits.

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Definitions:

Public Goods

Items or services that are non-excludable and non-rivalrous, meaning they can be used by anyone without diminishing their availability to others.

Private Consumption

The totality of goods and services consumed by private individuals, as opposed to those consumed by the government or businesses.

Marginal Products

The additional output that is produced by adding one more unit of a specific input, holding all other inputs constant.

Separating Equilibrium

An outcome in a signaling game where different types of senders choose different signals, leading to a situation where the receiver can perfectly infer the sender's type based on the signal received.