Which of the Following Explains the Role of the Canadian

question 26

Multiple Choice

Which of the following explains the role of the Canadian Deposit Insurance Corporation (CDIC) ?

• A)The CDIC protects depositors in the event of bank failures.
• B)The CDIC routinely makes overnight loans to banks.
• C)The CDIC determines the bank rate.
• D)The CDIC determines the reserve requirement.

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Definitions:

Variable Interest Entity

A legal entity in which an investor holds a controlling interest that is not based on the majority of voting rights.

Consolidation

The process of combining financial information from several departments or subsidiaries within a company into a single financial statement.

Controlling Financial Interest

A situation where an entity has the power to govern the financial and operating policies of another entity so as to benefit from its activities.

Consolidated Retained Earnings

The accumulated net income of a corporation and its subsidiaries after dividends have been paid out to shareholders, presented in the consolidated financial statements.