Which of the Below Statements Is TRUE

question 43

Multiple Choice

Which of the below statements is TRUE?

• A) Depository institutions do not include commercial banks (or simply banks), savings and loan associations (S&Ls), savings banks, and credit unions.
• B) Since their funds are raised through deposits and other funding sources, depository institutions cannot make direct loans to various entities or invest in securities.
• C) Depository institutions derive their income from two sources: (1) the income generated from the loans they make and the securities they purchase, and (2) fee income.
• D) It is uncommon to refer to S&Ls, savings banks, and credit unions as thrifts, which are specialized types of depository institutions.

---

Definitions:

Preoperational

A stage in Jean Piaget’s theory of cognitive development, where children from about 2 to 7 years old learn through pretend play but still struggle with logic and taking the perspective of other people.

Reductive

A method or approach that simplifies complex systems or phenomena by breaking them down into their most basic components or aspects.

Analytical Thinking

The process of breaking down complex information into smaller components for better understanding or problem solving.

Logical

Pertaining to or characterized by clear, rational, and coherent reasoning or thinking.