Pooling Risk

question 3

Multiple Choice

Pooling risk

• A)refers to a default contract made by a bank to other banks.
• B)refers to spreading the risk of loan default among all the depositors within the depository institution.
• C)is now illegal under the Nuisance Act of 2014.
• D)occurs when one person lends to an entire group or pool of borrowers.
• E)refers to the lower cost of obtaining funds from a depository institution.

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Definitions:

Autonomous Morality

A stage in moral development where individuals understand and apply their own set of moral principles, often independent of external authority or conventions.

Heteronomous Morality

The stage in child development where moral thinking is tied to obedience and punishment, typically regulated by external authority.

Conventional Moral Reasoning

A stage in moral development where individuals make judgments based on societal rules and laws.

Transgression

is an act that goes against a law, rule, or code of conduct; an offense.