As DIs Made a Shift from an "Originate-To-Hold" Banking Model

question 108

Multiple Choice

As DIs made a shift from an "originate-to-hold" banking model to an "originate-to-distribute" model over the last decade,

• A)banks became more financially stable.
• B)it became easier to measure the riskiness of individual loans.
• C)there was a dramatic increase in systematic risk of the financial system.
• D)the Federal Reserve decreased the number of services that banks could provide.
• E)it became more difficult for households to obtain credit.

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Definitions:

Organization Expenses

Costs incurred in the formation of a corporation, partnership, or other business entity, typically including legal and registration fees.

Paid-in Capital

The amount of money that a company has received from shareholders in exchange for shares of stock, beyond the par value of the shares.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders, often used for reinvestment in the business or to pay off debt.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with fixed dividends.