The View That Depositors Hire Banks to Analyze the Financial

question 18

Multiple Choice

The view that depositors hire banks to analyze the financial condition of prospective borrowers and continually evaluate the condition of outstanding loans is referred to as:

• A)delegated monitoring.
• B)the concept of financial intermediation.
• C)the liquidity function in banking.
• D)market imperfection theory.
• E)the efficiency contribution of banking.

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Definitions:

Central Nervous System

Consists of the brain and spinal cord, functioning as the primary processing center for the nervous system, coordinating sensation and movement.

Alzheimer's

A progressive neurodegenerative disease characterized by memory loss, cognitive decline, and personality changes, leading to severe dementia.

Memory Loss

The inability to remember information or experiences, which can be temporary or permanent, and is often associated with conditions like Alzheimer's disease.

Emotional Instability

A condition characterized by rapid and intense emotional changes that are disproportionate to the situation at hand, affecting one's psychological well-being.