Deposit Insurance Helps to Reduce the Likelihood Of

question 59

Multiple Choice

Deposit insurance helps to reduce the likelihood of:

• A) loan defaults.
• B) loans.
• C) bank runs.
• D) money creation.

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Definitions:

Collecting Loans

The process of obtaining repayment of a loan or debt, including the principal and any accrued interest.

Investing Activities

Financial activities related to the acquisition and disposal of long-term assets and other investments not considered as cash equivalents.

Financing Activities

Financial transactions primarily involved with funding the company and its capital structure, including issuing debt, paying off debt, and equity transactions.

Issuing Debt

The process in which a corporation or governmental entity raises funds by selling bonds, bills, or notes to investors with a promise to pay back the principal along with interest on a specified date.