The Most Important Developments That Have Reduced Banks' Cost Advantages

question 40

Multiple Choice

The most important developments that have reduced banks' cost advantages in the past twenty years include

• A) the growth of the junk bond market.
• B) the competition from money market mutual funds.
• C) the growth of securitization.
• D) all of the above.
• E) only A and B of the above.

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Definitions:

Conglomerate Merger

A merger between companies in unrelated businesses.

Vertical Merger

A merger between companies when one is a supplier or a customer of the other.

Horizontal Merger

A merger between companies in the same line of business, usually as competitors.

Tender Offer

An offer to purchase some or all of shareholders' shares in a corporation at a specific price for a certain period.