Which of the Following Is Characteristic of a Banking System

question 79

Multiple Choice

Which of the following is characteristic of a banking system composed of a large number of small banks?

• A)The safety and soundness of the banking system would not be threatened with a few bank failures.
• B)Competition would be discouraged.
• C)Individual banks have a smaller risk of failure.
• D)The industry would be highly non-competitive

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Definitions:

Probability

A measurement of the likelihood or chance that a certain event will occur, expressed as a number between 0 and 1 (where 1 indicates certainty).

Utility

A measure of satisfaction or happiness that a consumer receives from consuming goods and services.

Expected Utility Function

A concept in economics and decision theory that represents an individual's preference for a set of possible outcomes based on a probability distribution.

Sure Payment

A fixed amount of money that is guaranteed to be paid under specified conditions.