Scenario: Alpha Bank Has $100,000 in Total Assets and $45,000

question 7

Multiple Choice

Scenario: Alpha Bank has $100,000 in total assets and $45,000 in total liabilities. Beta Bank has $250,000 in total assets and $220,000 in total liabilities.
-Refer to the scenario above.What is Beta Bank's other option in the case of a bank run to avoid being taken over by the government if it cannot pay out all its deposits?

• A) Take in more deposits and use those to pay off the ones being withdrawn
• B) Get a loan from the central bank
• C) Apply for a bailout from the government
• D) Be bought out by a stronger bank

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Definitions:

Sensation Seeking

A personality trait defined by the search for experiences and feelings that are varied, novel, complex, and intense, and the willingness to take physical, social, legal, and financial risks for the sake of such experiences.

Risks

The potential for losing something of value or the possibility of an unfavorable outcome.

Sensation Seeking Behavior

A trait characterized by the search for experiences and feelings that are varied, complex, novel, and intense.

Age

The length of time that a person or organism has been alive or a thing has existed.