The Payoff Method Used by the FDIC to Address the Insolvency

question 120

Multiple Choice

The payoff method used by the FDIC to address the insolvency of a bank is when the FDIC:

• A)Pays the owners of the bank for the losses they would otherwise face
• B)Pays off all depositors the balances in their accounts so no depositor suffers a loss, though the owners of the bank may suffer losses
• C)Pays off the depositors up to the current $250,000 limit, so it is possible that some depositors will suffer losses
• D)Takes all of the assets of the bank, sells them pays off the liabilities of the bank in full and then replenishes their fund with any remaining balance

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