What Does a High Proportion of Brokered Deposits Indicate

question 28

Multiple Choice

What does a high proportion of brokered deposits indicate?

• A)Total risk-based capital ratio of the DI is less than 10 percent.
• B)Above average risk,and thus an increased potential for failure.
• C)Less informed savers are protected against a reduction in wealth.
• D)Reduced insolvency risk as brokered deposits are covered under deposit insurance.

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Definitions:

Discrimination Law

The body of law that prohibits unfair treatment of individuals based on certain protected characteristics such as race, gender, age, and disability.

Apparent Agency

A legal concept where a principal is liable for the acts of an agent who appears to be acting within the scope of authority, irrespective of whether the principal actually granted such authority.

Express Agency

An agency relationship created by explicit instruction or agreement, where the agent is authorized to act on behalf of the principal.

Implied Agency

A type of agency relationship created by the actions of the parties involved, not by written agreement, where an agent is presumed to have authority to act on behalf of another.