Concern About the Improper Transfer of Inside Information Has Been

question 133

Multiple Choice

Concern about the improper transfer of inside information has been used to justify product segmentation on the grounds of

• A)safety and soundness issues.
• B)economy of scale and scope issues.
• C)conflict of interest issues.
• D)deposit insurance issues.
• E)regulatory oversight issues.

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Definitions:

Capital Rationing

The situation that exists if a firm has positive Net Present Value projects but cannot find the necessary financing.

Marginal Costs

The change in total production cost that arises when the quantity produced is incremented by one unit, reflecting the cost of producing one additional unit of a good.

Incremental Costs

Costs that change or increase depending on the decisions made by a company, such as starting a new production process or producing more units of a product.

Fixed Costs

Expenses that do not change with the level of production or sales activities, such as rent or salaries.