Which of the Following Is an Example That Can Help

question 33

Multiple Choice

Which of the following is an example that can help explain increased profits for large financial holding companies?

• A) Financial holding companies offer a wide array of services under many brand names.
• B) Financial holding companies need only one CEO, one Board of Directors, and one computer system regardless of size.
• C) Financial holding companies are not well diversified and receive a higher return for the higher risk.
• D) Financial holding companies are exempt from having to pay for FDIC insurance.

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Definitions:

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time.

Present Value Index

The Present Value Index is a financial metric used to evaluate the viability of a project or investment by comparing its present value of future cash flows to the initial investment.

Investment Proposals

Documents or presentations by a company or individual seeking to attract investors by outlining potential investment opportunities and expected returns.

Compound Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.