Nationwide Banking Might Reduce Bank Failures Due to

question 10

Multiple Choice

Nationwide banking might reduce bank failures due to

• A)reduced competition.
• B)reduced lending to small businesses.
• C)diversification of loan portfolios across state lines.
• D)elimination of community banks.

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Definitions:

Carrying Costs

Expenses associated with maintaining inventory, including storage, insurance, and spoilage costs.

Ordering Costs

Expenses incurred in placing and receiving orders for goods, including transportation, handling, and clerical costs.

Option Contract

A financial derivative that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price within a specified timeframe.

Futures Contract

A forward contract with the feature that gains and losses are realized each day rather than only on the settlement date.