Which of the Following Is Not True for Banks in Developing

question 178

Multiple Choice

Which of the following is not true for banks in developing countries?

• A) Banks are often viewed with suspicion.
• B) Many bank depositors withdraw their funds at the first sign of economic problems.
• C) Banks often make loans for extended periods because they can easily rely on a continuous supply of deposits.
• D) If financial institutions fail to serve as intermediaries between savers and borrowers, the lack of funds for investment becomes an obstacle to growth.
• E) The credit provided by banks as a percentage of total output is one-fifth of that in high-income countries.

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Definitions:

Investment Opportunity

A potential financial investment that may yield returns, including stocks, bonds, real estate, or starting a new business venture.

Return On Investment

A profitability ratio that calculates the return gained on an investment relative to the investment’s cost.

Investment Opportunity

Investment Opportunity is a term used to describe a business, project, or asset that has the potential to generate significant financial returns or profits.

Minimum Required Rate

The lowest acceptable rate of return on an investment, set by the investor.