The Reduction in Deposit Funds Cost to an Individual Bank

question 35

Multiple Choice

The reduction in deposit funds cost to an individual bank brought about by government insurance is an example of the

• A)social benefit of regulation.
• B)private cost of regulation to DIs.
• C)private benefits of regulation to DIs.
• D)net regulatory burden.
• E)none of the options

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Definitions:

Constant Growth

A steady and unchanging rate at which the value or size of something increases over a specific period.

Flotation Costs

The total costs incurred by a company in issuing new securities, including underwriting, legal, and registration fees.

Cost of Equity

The return a company theoretically pays to its equity investors as a reward for taking on the risk of investing in the company.

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.