One Reason Suggesting That Banks May Be Better Than Individuals

question 17

Multiple Choice

One reason suggesting that banks may be better than individuals at matching lenders to borrowers is that banks:

• A) can shift loan risk to their deposit customers.
• B) are motivated by the potential for profit.
• C) do not have any income tax liability.
• D) have information to evaluate creditworthiness.

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Definitions:

Subsidiary Financial Statements

Financial statements that detail the financial status and performance of a subsidiary company, separate from its parent company's statements.

Management Approach

A principle in financial reporting that allows an entity to use its internal management structures and processes as the basis for organizing and presenting its financial information.

External Reporting

involves the preparation and disclosure of financial statements and other information to external stakeholders.