When a DI Makes a Shift from an 'Originate-To-Hold' Banking

question 11

Multiple Choice

When a DI makes a shift from an 'originate-to-hold' banking model to an 'originate-to-distribute' banking model, the change is likely to result in:

• A)increased operating costs
• B)increased interest rate and liquidity risk
• C)decreased monitoring costs
• D)decreased fee income

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Definitions:

Wayne's Jacket Shop

A hypothetical or specific retail business specialized in selling jackets.

Imperfectly Competitive Market

A market structure where all firms have some control over the prices because the products are differentiated and there are few participants.

Total-Product Schedule

A chart that shows the maximum output of a good achievable from different levels of input usage, holding technology constant.

Purely Competitive

A market structure characterized by a large number of small firms, homogeneity of product, and free entry and exit from the market.