Disintermediation Occurred in the S&L Industry

question 21

Multiple Choice

Disintermediation occurred in the S&L industry

• A)when funds were transferred from commercial paper markets into S&L deposits.
• B)when funds were withdrawn from S&Ls and reinvested directly in the open market.
• C)because the Fed raised Regulation Q ceilings.
• D)because sharply falling interest rates led depositors to abandon the low returns paid on S&L deposits.

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Definitions:

Insurance Policy

A contract between the insurer and the policyholder specifying the terms under which the insurer agrees to compensate the policyholder for loss.

One Year

A period of time consisting of 12 months or 365 days, used as a standard measurement of time for financial, contractual, and planning purposes.

Fiscal Year

A one-year period that companies use for accounting and financial reporting, which may or may not align with the calendar year.

Adjusting Entry

An accounting entry made at the end of an accounting period to allocate income and expenditure to the appropriate period for a more accurate financial statement.