Reasons Regulators Chose to Follow Regulatory Forbearance Rather Than to Close

question 69

Multiple Choice

Reasons regulators chose to follow regulatory forbearance rather than to close the insolvent S&Ls include all of the following EXCEPT

• A)they had insufficient funds to close all of the insolvent S&Ls.
• B)they were friends with the S&L owners.
• C)they hoped the problem would go away.
• D)they did not have the authority to close the insolvent S&Ls.

---

Definitions:

Fixed Expenses

Costs that do not change with the level of company activity or production volume, such as rent or salaries.

Unit Contribution Margin

The profit per unit sold, calculated by subtracting the variable cost per unit from the selling price per unit.

Break-Even Point

The level of production or sales at which total costs equal total revenue, meaning the business neither earns nor loses money.

Contribution Margin Percentage

The ratio of contribution margin (sales revenue minus variable costs) to total sales revenue, expressed as a percentage.